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China Proposes a Digital Identity System for Metaverse Regulation

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Key Points

  • Due to the collecting of personal data, China Mobile’s proposal for a digital identity system to control the metaverse raises privacy issues.
  • Since the proposed system is modeled after China’s social credit system and collects and maintains personal information, it has drawn criticism.
  • China’s metaverse sector is expected to expand enormously, with a projected 40% rise in 2023, despite opposition.

China Mobile, a telecom company, has proposed a “digital identity system” to control the metaverse and stop the spread of confusion or misinformation online.

China may have prohibited crypto-related activity, but it is actively getting ready for the metaverse. However, proponents of privacy have cast doubt on the digital identity framework.

China Wants to Collect Users’ Personal Information on the Metaverse

Politico claims that China’s social credit system and its digital identity scheme for the metaverse are quite similar. The digital identity system would be created to gather the user’s personal information, such as their employment, distinguishing characteristics, and other such information.

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In order to ensure a secure environment in the metaverse, China Mobile has also recommended that law enforcement permanently keep this data. It thinks that personal information could help authorities track down criminals in the virtual world.

In December 2022, a special committee for metaverse regulation was established by the International Telecommunication Union (ITU), the UN’s information and communication organization. The metaverse committee will probably vote on China’s proposal in October, according to a Politico story.

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The concept has, however, drawn sharp criticism from the experts due to parallels it shares with the social credit system. Friends of Europe’s Chris Kremidas-Courtney 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.”

The social credit system in China serves as a legal foundation for determining how trustworthy a person is. A low grade might land a person on several blacklists, including ones that prevent them from using public transportation.

Various projections indicate that China’s metaverse sector is headed toward exponential expansion in the meantime. According to a survey from April, the metaverse market in China is predicted to expand by 40% by 2023.

By 2030, the metaverse business will have expanded by at least seven times, predicts Statista. The industry is estimated to be worth $12.6 billion this year and $87.6 billion in the following seven years.

Metaverse valuation in China. Source: Statista

Policing the Metaverse

Other nations outside China are also looking into policing the metaverse. Hong Kong launched the CyberDefender Metaverse in May 2023 to combat crimes committed in the metaverse such fraud, hacking, theft, and sexual assaults.

Before that, in October 2022, INTERPOL introduced a global metaverse for law enforcement. The first police organization to offer its services through the metaverse was the Ajman Police in Dubai.CRYPTOCASTER® - DECENTRALIZED FREEDOM!


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