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Norway’s Taxing the Metaverse

If you thought you could escape the certainty of taxes in the metaverse, think again

Photo by Michael Fousert / Unsplash

Norway is building a metaverse tax office. In a bid to educate youngsters about taxable gains—including those from decentralized finance (DeFi) and Non-fungible tokens (NFTs), Norway is entering the metaverse.

The Brønnøysund, Norway's central register, announced that they are partnering with consulting firm Ernst and Young (EY) to establish an office in Web3 virtual platform Decentraland. They announced that the goal of the initiative is to deliver services to young, tech-savvy individuals while establishing their Web3 footprint.

Norway but the Hard Way

There’s no easy route to reaching and educating young, tech-savvy entrepreneurs, which is perhaps why Norway has taken the path of partnering with consulting firm EY. Magnus Jones, EY’s blockchain lead, said he hopes the partnership will help educate viewers about the tax implications of DeFi and NFTs in a more informal way.

Jones applauded the Norwegian authorities for daring to enter the new space in an attempt to bring clarity into a “complex landscape”. He further added they’d be one of the first to issue guidance “on how to tax DeFi and also NFTs” while “being a front runner in the crypto space in general”

Norway—A Crypto Haven?

Besides joining Decentraland to educate the young and soon-to-be-taxed, Norway has been exploring crypto at a national level. They are releasing a capitalization tables platform for unlisted companies through the use of Ethereum scaling solution called Arbitrum.

Using the platform, Norwegian citizens will be able to invest in shares of unlisted companies. Using Arbitrum as an Ethereum-scaling solution makes the process much more energy-efficient and sustainable. Shares in unlisted companies are minted as crypto tokens. Another Ethereum-based solution called Ceramic will be used on the platform to store and transfer personal data in a GDPR-compliant manner.

Besides this, Norway has also announced an interesting partnership with the Bank for International Settlements to explore the viability of a Central Bank Digital Currency (CBDC) for instant and costless cross-border payments.

Crypto’s Going Mainstream?

Crypto is usually touted as a potential payment solution for the metaverse. And while MasterCard are quickly rising as a challenger with their metaverse strategies, many companies are seeing the potential of crypto to bolster their economies and industries.

While Norway delves deeper down the crypto rabbithole, other countries are also integrating Web3 tools and DeFi into their national strategies. In July, a policy briefing by Shanghai's civic government said it plans to bolster its metaverse industry to $52 billion by 2025. Earlier this year, Japan’s Prime Minister even said the country would incorporate the metaverse and Non-Fungible Tokens (NFTs) in its plans for digital transformation that would be “human-centered” and leave no one behind.

As more companies come to integrate these new digital currencies into their economies, it wouldn’t be surprising to see crypto become mainstream as a consequence, and therefore play an important role in metaverse payments.