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China Proposes to Regulate Metaverse Through Digital Identity System

2 mins
Updated by Geraint Price
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In Brief

  • China Mobile is proposing a digital identity system to regulate the metaverse, raising privacy concerns due to personal data collection.
  • The proposed system is facing criticism as it collects and stores personal information, and is similar to China's social credit system.
  • Despite criticism, China's metaverse industry is predicted to grow exponentially, with a projected 40% growth in 2023.
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China’s telecom operator, China Mobile, has pitched a “digital identity system” to regulate the metaverse and prevent the spread of chaos or rumors in the digital world.

While China may have banned crypto-related activities, it is in a full-fledged preparation stage for the metaverse. However, the privacy flag bearers have questioned the digital identity system.

China Wants to Collect Personal Data of Metaverse Users

According to Politico, China’s digital identity system for the metaverse has striking similarities with its social credit system. The digital identity system would be designed to collect the user’s personal data, like their occupations, identifiable signs, and other such data. 

Moreover, China Mobile has suggested that law enforcement permanently store this data to maintain a safe environment in the metaverse. It believes that personal data could aid police in investigating bad actors in the virtual world.

The United Nations’ information and communication agency, the International Telecommunication Union (ITU), inaugurated a special group for metaverse regulation in December 2022. Politico’s report mentions that the metaverse group will likely vote on China’s proposal this October.

However, as the proposal has similarities with the social credit system, it has received heavy criticism from the experts. Chris Kremidas-Courtney, from Friends of Europe, said:

“To build a unified digital identity system, to give each human a unique digital ID that includes social characteristics from social media and occupation – that sounds a lot like China’s social credit system.”

China’s social credit system is a regulatory framework to rate an individual’s trustworthiness. A poor score may result in various blacklists, including blocking the person from accessing public transport. 

Meanwhile, various forecasts show that China’s metaverse industry is on its road toward exponential growth. In April, BeInCrypto reported that China’s metaverse industry is expected to grow by 40% in 2023.  

Click here to read our article on the top 10 metaverse platforms to watch out in 2023.

According to Statista, the metaverse industry will grow at least seven times by 2030. This year, the sector is worth $12.6 billion, forecasted to hit an $87.6 billion valuation in the next seven years.

Metaverse valuation in China. Source: Statista
Metaverse valuation in China. Source: Statista

Metaverse Policing

Not just China, but various other countries are also exploring policing the metaverse. On May 2023, Hong Kong launched the CyberDefender Metaverse to tackle metaverse crimes such as fraud, hacking, theft, and sexual offenses.

Prior to that, in October 2022, INTERPOL launched a metaverse for law enforcement worldwide. And Dubai’s Ajman Police became the first police agency to provide its services through the metaverse. 

Got something to say China plans to regulate the metaverse or anything else? Write to us or join the discussion on our Telegram channel. You can also catch us on TikTok, Facebook, or X (Twitter).

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In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content.

Harsh Notariya
Harsh started investing in crypto during the 2021 bull market. He took the opportunity of the market crash in May to learn more about Bitcoin and blockchain technology. Since...