​Metaverse Craze: Chinese Media Warns of Hype, Regulatory Risks

Amidst a flurry of media hype regarding the Metaverse, China’s CCTV released a financial report on December 10 which indicated that virtual real estate transactions had increased significantly in the Metaverse, reaching up to US$100 million in a single week, raising concerns over its uncertainties and potential risks.
China’s CCTV Warns of Metaverse Craze and Regulatory Risks

In recent years, the term “metaverse” has become a popular buzzword as people strive to enter and explore the world of virtual reality. In late 2020, China’s Central Political and Legal Committee even issued a warning about the potential for a Ponzi scheme and other money laundering risks related to the metaverse. Now, China’s official media CCTV has chimed in, highlighting the economic and regulatory risks associated with the meteoric rise of the metaverse.

On December 10th, a CCTV financial channel report entitled “Real estate speculators hit the virtual real estate in the metaverse” states that late November saw a massive surge in transactions, with a weekly cash flow of US$106 million. The report claims that the project’s popularity, development maturity and community activity are the key determinants of future growth.

What’s more, the report has sparked a flurry of reactions from Chinese media outlets. The People’s Daily declared that the metaverse was “so hot that the risk of scalding must be prevented” and the People’s Industrial Economics Observation noted that “most of the concepts of the metaverse are suspected of speculation.” China News Network characterized the recent enthusiasm for the metaverse as “Is it to cut leeks, or is the value unlimited?”

Indeed, many celebrities and prominent companies have jumped on the bandwagon, including famous singers JJ Lin and Justin Bieber as well as sports brand Adidas. On November 23, the blockchain investment company Tokens.com announced that it had purchased virtual land in Decentraland worth $2,428,740 in Decentraland token MANA.

Perhaps the most significant development, however, is Decentraland’s announcement that it can allow its users who own virtual land to become landlords, and that all rentals will be performed in Decentraland token MANA. This adds an extra layer of functionality to the platform and creates a legitimate opportunity for users to generate passive income.

Finally, the metaverse debate has recently been taken up in a more formal setting at the World Economic Forum’s “Defining and Building the Metaverse” initiative. With over 120 participants, the discussion has inevitably reveled in recent traction, with Google Trends showing a gradual decline in interest in the term.

That said, this technology is not without its challenges. Chief among these is regulation – which is a major obstacle in the way of further widespread adoption. Moreover, some experts have pointed to the danger of dilution with The Sandbox token until the end of 2024.

Ultimately, the jury is still out on the metaverse craze. Chinese media outlets have warned the public to consider the risks when dealing in the metaverse, but the current rush of investment indicates that many people are willing to take the risk. Only time will tell if the metaverse craze will be a long-term trend or a fleeting fad.

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Rina Giannino
Journalist venturing into blockchain, Rina has been a follower of the technology since 2019 and finally taken the plunge with a career as a journalist in the industry.