Meta is trying to persuade lawmakers not to regulate the cryptocurrency market too harshly. Despite the recent fall of crypto lender Celsius, the ongoing collapse of FTX, and the devastated 2022 crypto market as a whole, Mark Zuckerberg wants to give crypto another chance for his vision of the Metaverse.
Once again, this raises the question about the metaverse and what it’s supposed to be. Meta has been lobbying lawmakers on crypto policies via Facebook and shared its vision for a Metaverse with NFTs and cryptocurrency for a while. Zuckerberg insists on making his vision more than a Second Life clone or a virtual meeting space for companies, but he has more hurdles to cross.
The FTX bankruptcy, ongoing lawsuits, and several federal investigations against the crypto exchange have severely impacted the view on products and services that are linked to cryptocurrencies. After billions of dollars in customer funds were improperly used and up to $2 billion has gone missing, FTX cast a dark shadow over an industry ripe with theft, fraud, and high-risk investments. Meta complains in one of its reports about this obstacle and what it means for its policy approach to the Metaverse:
“At present, a perspective informed principally by skepticism of cryptocurrencies hangs over blockchain’s non-financial applications and risks stymying innovation in the sector.”
The company went on to say it understands why policymakers are focusing on the application of blockchain technology in financial services. Yet argues it’s also important to recognize that blockchain has extensive non-financial applications which can be foundational to the Metaverse economy.
Meta wants to convince lawmakers the Metaverse involves different use cases and risks that shouldn’t be treated the same way as other digital and crypto assets. The social media giant also attempts to dispel the aura of skepticism around crypto by claiming the Metaverse will contribute $3 trillion to global GDP by 2031. That’s a bold statement.
Meta Is Concerned with NFTs and Monetization
Meta’s main worry is that new crypto and NFT regulations will impact the Metaverse’s revenue streams. At the same time, the company mentions the “extensive non-financial applications” of NFTs while still being tokens on a blockchain. The resale on the open market is pretty much the main pillar of NFTs. So it sounds like Meta wants to have its cake and eat it too.
Meta compares NFTs to physical art and claims they should be seen as equal products, so regulators shouldn’t touch them. How can that work when an NFT is specifically generated as a financial instrument meant to be used for market speculation?
If it’s meant to be for non-financial applications, why doesn’t Meta just create digital trading items like game developers have been doing for over a decade? This also doesn’t add up with Meta’s own statement about NFT monetization:
“We’re introducing a way for creators to make their own digital collectibles (or NFTs) and sell them to fans and collectors both on and off Instagram.”
Meta wants lawmakers not to affect the possibility of using NFTs as a major revenue stream for Facebook, Instagram, and the Metaverse. Facebook is already building the digital infrastructure necessary for digital products and markets in the Metaverse, allowing everyone to trade digital assets.
With every aspect of the Metaverse becoming linked to digital products and services, Meta stands to make a significant cut from all the transactions that will take place… as long as regulations don’t stand in their way.
Protect Yourself from Online Scams
Cryptocurrencies and NFTs have always been used by certain entities for online scams and to make a quick profit before disappearing. Even large players that we thought were legit, like FTX, proved to be susceptible to acts of fraud.
Will that happen with Meta as well? We don’t know, but a good dose of skepticism is healthy during these dark times for crypto and NFT markets. So make sure to protect your digital assets and remember to use CyberGhost VPN to boost your digital security.