The metaverse isn’t just for gamers, concerts, or brand experiments anymore. Governments are beginning to explore immersive virtual worlds as new channels for public services, citizen engagement, and digital readiness. From Norway’s public agencies testing Decentraland, to South Korea’s Metaverse Seoul, to the UN-backed Citiverse initiative, early initiatives show real potential; but they also reveal deep tensions. Unlike private actors, governments cannot simply “move fast and break things”. Their legal and ethical obligations follow them into virtual worlds.
Spoiler alert: governance isn’t a boring afterthought; it shapes the entire experience.
Why is the Public Sector Drawn to the Metaverse
Public institutions are under pressure to modernise, meet citizens where they already are online, and engage younger generations. Virtual worlds promise immersive ways to deliver services (think virtual city halls), explain complex policies, and humanise government experiences. In theory, the metaverse could become the next digital front desk for public sector. But once public agencies step inside the metaverse, they quickly discover they are constrained by three big, unavoidable problems.
Image source: “Seoul eyes title of ‘leading smart city’ with multibillion-won metaverse project,” Korea JoongAng Daily, 2023. Source.
- Where exactly is a Public Entity in the Metaverse?
In the physical world, government authority is tied to territory. In the metaverse, borders melt. Leaving public institutions struggling to define where their authority begins and ends in virtual worlds. This raises difficult questions about which laws apply, who is responsible when something goes wrong, and how do citizens know they are interacting with an official public service. Research shows that governments and users alike need clearer signals (visual cues, labels, or explicit transitions) that mark entry into regulated public-sector spaces. Without clear boundaries, legitimacy and trust are hard to maintain.
Presence isn’t just about feeling immersed, it’s about feeling institutionally safe.
- Existing laws don’t magically disappear in VR
Moving into the metaverse does not mean escaping regulation. Data protection, transparency, and accountability rules still apply in virtual environments, despite them being written for websites and paper forms, not avatars and immersive interactions. Long privacy notices and explaining automated decisions does not translate well into VR and traditional consent pop-ups kill immersion. Public-sector metaverse initiatives are being pushed to embed transparency, consent, and explainability directly into the experience, to ensure compliance without breaking immersion.
Regulation is a design problem, not just a legal one.
- Identity is the hardest problem (By far)
Governments need to know who they are dealing with to prevent fraud, ensure fair access, and protect citizens. The metaverse, however, is built around anonymity and pseudonymity. Forcing users to fully “de-mask” breaks immersion, raises privacy concerns, and discourages participation. This explains why many public agencies limit their presence to information sharing rather than full-service delivery. A promising middle ground is layered identity: allowing users to remain pseudonymous for exploration, while securely verifying identity only when accessing official services. Even so, most platforms are not yet designed to support this balance and when done poorly can exclude users or undermine trust.
This isn’t just technical, it’s ethical!
So, Is Public Sector in the Metaverse a Bad Idea?
Not at all – but it’s not plug-and-play.
The key insight from these early initiatives is clear: governance is not a boring add-on to the metaverse, it’s part of its architecture. For public entities, success in immersive worlds will depend less on impressive virtual buildings and more on governance-by-design that embeds public values directly into how these spaces work. Public-sector metaverse projects can work with ethical alignment that boost trust and adoption and intentional governance design that supports compliance and builds credibility.
Governance isn’t an external constraint; it’s a core design ingredient!
Article by Phylicia Babb – AGORA Doctoral Candidate and PhD Research Fellow in the Department of Information Systems at the University of Agder, Norway. Her research examines how metaverse design characteristics intersect with public sector mandates and what this means for governance.
This research is part of the AGORA project, funded by the European Union’s Horizon Europe research and innovation programme under the Marie Skłodowska-Curie grant agreement No 101119937 .