Skip to main content

This page has been translated using TexTra by NICT. Please note that the translation may not be completely accurate.
If you find any mistranslations, we appreciate your feedback on the "Request form for improving the automatic translation ".

Web3.0 Study Meeting (Follow-up Meeting)

Overview

  • Date and time: April 18, 2023 (Tue) from 3:00 pm to 4:45 pm
  • Location: Online
  • Agenda:
  1. Opening
  2. Proceedings
    1. Secretariat Explanation
    2. Explanation of efforts from the relevant ministries and agencies
    3. Future Policy
    4. Exchange of opinions
  3. Adjournment

Materials

Minutes

Date

From 3:00 pm to 4:45 pm on Tuesday, April 18, 2022

Location

Online Meetings

Attendees

Members

  • Jiro Kokuryo (Professor, Faculty of Policy Studies, Keio University)

  • ISHII Natsu Shori (Professor, Faculty of International Information Studies, Chuo University)

  • Joichi Ito (Director and Chief Architect of Digital Garage, Inc., Director General of the Innovation Center of Chiba Institute of Technology)

  • Yuko Kawai (CEO of Japan Digital Design Co., Ltd.; Executive Director of the Strategic Planning Department of Mitsubishi UFJ Financial Group, Inc.; Executive Director of the Strategic Planning Department of MUFG Bank, Ltd.)

  • Keiji Tonomura (Attorney, Nagashima, Ohno & Tsunematsu Law Office)

  • Taiyō Fujii

  • Shinichiro Matsuo, Research Professor, Georgetown University

Digital Agency (Secretariat)

  • Minister Kono, Senior Vice-Minister Okushi, Director General Kusunoki, Councilor Nozaki

Minutes

  • Greetings from Minister for Digital Transformation Kohno
  • Secretariat, METI, FSA, Ministry of Internal Affairs and Communications, and CAO explained the progress of initiatives after the publication of the Web3.0 Study Group Report.
  • Secretariat explained future policy

The following comments were mainly made by the members in the question-and-answer session and the exchange of opinions.

Member: Web3.0 Study Group DAO is a very important experiment, and I think it is moving in a good direction. It is the first time in the world that a place where various members from each ministry, private sector, and academic society can come in was created triggered by the country, and it is gaining attention internationally. The beauty of Web3.0 is that it is possible for anyone to participate, and it is fine if everything is compatible without standardization, so coordination is very important. It is important for anyone to participate in the coordination forum in which the country participates, and to agree on what should be agreed and adjust what should be adjusted in a transparent manner. In addition, in diplomacy, Web3.0 seems to be a new way of Trust tools. From this week to last week, conferences such as FATF and Ethereum have been held, and various layers around the world, including politics, administration, and private sector, have worked on Web3.0 together and brought back the results. It will be very valuable if the country can properly participate and private sector and overseas can be involved so that this DAO can be used as a new form of public-private partnership. I think it can be applied to new technologies other than Web3.0 and social adjustment, so for example, AI can be discussed in this.

Member: I would like to say about three things. First of all, I participated in the FATF and Ether Global Tokyo events, and I am glad that more Japanese people are jumping into development globally than before. The week after next, there will be financial cryptography and BGIN events, and we will discuss DID, government use cases of Soulbound Tokens (SBT) and DAO, privacy protection, etc. Japanese members, including Digital Agency, are also involved in the creation of global rules, so I would like you to continue to work on them while sharing what happened at this workshop.

Second, in the METI slide, there is a story about creating an undivided community and helping each other. I think that is exactly the case, but on the other hand, the word "community building" alone does not give the impression that it will last long. If engineers, academia, and business are going to cooperate together, it is better to create more specific goals, such as creating software and infrastructure together, like the example of BSD (Berkeley Software Distribution) in the history of the Internet. To this end, it is necessary to develop human resources for young people, and it is desirable that people involved in Ether Global Tokyo, high school students, technical college students, and university students will be more involved. The White House has released a document called the National R & amp; D Objectives, which describes the direction R & amp; D should aim for and specific priority themes. In the future, competition for human resources is expected around the world, and from the perspective of how Japan will demonstrate its presence, I would like to ask METI to elaborate the document.

Third, with regard to AI, which was mentioned in the plan for how to proceed in the future, we believe that the time has come when digital data in the world cannot be used for trials as it is because of the ChatGPT. Given that blockchain technology originally came from time stamps and digitization of notary public offices, I think it would be good to proceed with consideration in the future, including the fact that it is necessary in the age of AI to process not only the information of the originator but also the responsibility relationship of human society with Web3.0 and blockchain.

Member: In the FSA materials, tokens are mentioned along with crypto assets in the list of initiatives, while in the METI materials, tokens are mentioned a lot. Are there any differences in the concept of tokens between the two?

Speaker: Funds Transfer Act, they will be subject to the regulation. I don't know if it is a general arrangement, but the Agency calls all digital assets issued on blockchains, including non-crypto assets, tokens. Therefore, among the number of tokens, there are crypto assets and NFTs. In addition, we believe that what is generally called NFTs is basically not a crypto asset.

Member: In that case, in the discussion of LPS investment targets earlier, is it correct to understand that LPS can be invested in crypto assets, but other tokens are not yet allowed?

Speaker: In this interpretation, reservations tokens under the FIEA, which are tokenized shares and security rights to new shares, will be included in the scope of investments. It will be clarified in this interpretation that LPS may invest in things that were originally subject to the LPS Act when they are tokenized. On the other hand, since crypto-assets are not included in the scope of assets under the LPS Act, they cannot be invested at present. We will consider how to include them in the scope of investments in the future.

Member: What is the hurdle?

Speaker: First of all, it is necessary to examine the demarcation of what kind of cryptoassets are suitable for the promotion of the smooth supply of funds by business operators, which is the purpose of the LPS Act. In addition, it is necessary to revise the law.

Member: generative AI and Web3.0, I would like to know how the government is trying to handle things that are not necessarily in a one to-one relationship, to the extent that you can explain it.

Speaker: government, so I would like you to discuss the mutual relationship and the possibility of it right here. What we had in mind was that as a large amount of information and content will be created one after another due to the rapid spread of generative AI, there will be a growing need to confirm who the originator is in a more transparent and reliable manner, and blockchain technology can be used in that case. Not limited to this, I think that various possibilities will be created by combining what we have been discussing in Web3.0 with the tool of AI, such as talks on optimizing DAO governance and incentive design, monitoring and fraud detection of transactions on blockchains, and analysis of NFTs and SBTs that recognize work experience and skills. I would like you to share with us if there are such possibilities.

Member: I would like to confirm about three points. First, regarding generative AI, Material 6 says "a large amount of information and content generated by AI," but is there any specific sign of the distribution of a large amount of content? In relation to this, it is arranged that things purely created by AI are basically not subject to copyright, but if they are created together with humans, the parts created by humans will be recognized as works of art. I was wondering if there would be a mechanism to transparently prove whether or not the copyright extends to the content posted on the blockchain, so I would like to ask if there is anything under consideration.

Second, with the revision of the Unfair Competition Prevention Law, it is said that the act of imitating a product form is also subject to the act of unfair competition when it is carried out in the digital space. Is it correct to understand that this is naturally applicable to the world of Web3.0?

Third, you pointed out that there are many parts that are not developed in terms of what rights and legal status are transferred by purchasing NFTs. However, I think there is an argument that the rights to purchase NFTs are only contractual status. Around this point, it is necessary to consider what rights will be generated by trading NFTs.

Speaker: , generative AI is spreading and a large number of AI products are being produced, but if they are linked to NFTs and distributed on public blockchains in the future, there may be a problem as to whether the AI products to be traded are copyrighted in the first place. To be honest, there has been no in-depth discussion on how to deal with such problems at present. Needless to say, the criteria for determining whether AI products are subject to copyright are extremely vague, and AI itself has become extremely high-performance, making it difficult to distinguish them from those made by humans. However, it is not so easy to determine whether or not AI products are copyrighted, even if they are made by humans, and it is not possible to know whether or not the content actually in circulation is actually subject to copyright until a trial is held, and such a problem has existed even before the emergence of AI.

Regarding the second point, design protection in virtual spaces, the current Unfair Competition Prevention Act provides regulation for acts that imitate the form of goods as a type of act of unfair competition. However, the "goods" referred to here are originally supposed to be tangible objects in real space, and even if the design of goods in real space is imitated by the design of virtual objects and provided as goods in virtual space, this is a situation in which regulation is not allowed. Due to this revision, the act of providing goods in virtual space is also included in unfair competition, and regulation will extend to both real and virtual spaces.

Member: At the stage when content is posted on blockchains, does it mean that it is posted without being able to determine whether or not it is copyrighted in the first place? Even if it is linked to originator information, etc., and even if the creator is commended for some responsibility, is it possible that whether or not the content is subject to rights remains unclear, just as the copyrightability is not clear even in the real world? Regarding the revision of the Unfair Competition Prevention Act, is it correct to understand that the act of imitating a product form in the metaverse is also applicable?

Speaker: NFT will also be subject to the Unfair Competition Prevention Law. In particular, in NFT, content data is not directly posted on the blockchain, only URLs are connected, and the actual content data is usually on the server, so if there is a form imitation, it will be possible to delete the data on the server. In the future, there is still a problem of what to do when a full-on chain is established, but at present, not all data is posted on the blockchain, so it will be possible to deal with it.

Member: In relation to the discussion of NFT rights, the Ministry of Economy, Trade and Industry has issued rules for electronic commerce, and in this fiscal year's revision, the item of crypto assets will be increased. It is expected that a Q & A explaining what it means to buy and hold NFT will be added, so I think it will be sorted out to some extent.

The issue of intellectual property rights is whether AI products made by generative AI can be copyrighted in the first place, and the position differs depending on the country. It is difficult to mechanically determine that this is a work, but if possible, it is very important to use it as a framework to prevent the distribution of illegal content in the form of AI determining the degree of infringement, such as whether the original work is copied as it is or whether it is made according to it.

Regarding the consultation service, I would like to know whether the reason why we are not in a situation where we are receiving more and more inquiries is that the dissemination has not been successful in the first place, or whether it has not been boiled down enough to require consultation. If there is anything that local government and the operator feel. In addition, I would like to know if there are any points of contention that can be applied to legal theory in relation to the DAO Law in the course of conducting various hearings on DAO.

Speaker: Consultation Office is not well known, but from the feeling of interacting with people who we could contact, we heard that they want to try various things on Web3.0, especially DAO, but they still do not know how to do it with what specific concept to realize the original good and philosophy of DAO. However, there is a possibility that the person we are listening to just happens to think so, or there is a possibility that they are talking to other competent ministries and agencies without coming directly to the Digital Agency Consultation Office, and there is a risk that the figure we are looking at is only a part, so how to improve it will be discussed in the future Issue.

Regarding the second point, whether there is an issue related to the DAO law, while some people say that it would be good if it would be limited liability, why the existing operation of operating both a separately established corporation and a DAO is not good, and we have not heard that the DAO law is absolutely necessary.

Member: DAO Law is to ultimately ensure limited liability. Even if a corporation and a non-DAO are run in parallel, if they are seen as members of the "non-DAO" and voluntary partnership is recognized, in the end, unlimited liability is the foundation of current Japanese law. Incidentally, if, for example, dividends are to be paid, the story of tax and the story of financial regulation are at least not clear. In that sense, it is significant to a certain extent to recognize DAO from the front in law and to clarify the treatment under the Companies Act, the Tax Act, and the FIEA. However, it does not mean that DAO cannot be done now without it, and since everyone is working on it, I think it is good to have both.

Member: supplement and one request. Regarding intellectual property, you introduced an article that says that works created in generative AI are not recognized as works of authorship, but that is a very special case. In the first place, in the United States, where the moral rights of authors are not clearly stated, the registration office of the work only issued a release that does not recognize the authorship of the content, and the release that recognizes the copyright as a property right was included in the set, but only a part of it was cut out, so it would be appreciated if the government and people concerned could properly convey such part. In addition, I would like to see a place where we, who distribute works, can properly discuss it while content and architecture are probably being generated endlessly. Both Japan and Europe treat copyrights differently from the United States, but even in the United States, where it is said that there is no moral right of authors, there are actually various forms of moral rights, such as owner's law and owner's light. If a place where we can bring out and discuss such things is created, it would be meaningful for us to work. If we create a DAO or other such place, I feel that it will be very strong.

Member: , I would like to make two points. First, regarding generative AI, practical work is rapidly accumulating, including whether copyrights will be recognized. What is clearly known is that there will be a huge amount of data. My personal impression is that I don't know if there is a real affinity between something with a huge amount of data and blockchain records. In addition, since practical work is still accumulating, I honestly have some doubts about whether we should consider what it is at this stage or whether generative AI should be taken up as a unique area in relation to Web3.0.

Second, as legislation is being developed in the field of cryptoassets, I would like to know if there are any institutional developments or points of contention that need to be observed in the future. In addition, what are your thoughts on systems and regulation related to tokens other than those already regulated by law?

Speaker: crypto-assets at this time. We have heard opinions that there is only one type of license to handle crypto-assets, but we believe that there is room for improvement in terms of operation within the current institutional framework. In addition, as I explained earlier, we are clarifying tokens that do not fall under the category of crypto-assets under the PSA, but we believe that there is no need to regulation tokens that do not fall under the category of crypto-assets at this time. On the other hand, it will be necessary to consider it depending on how tokens will be handled in the future.

Member: generative AI, it's hard to imagine right now that blockchains, especially permissionless blockchains, would be useful for any kind of rights-handling involving generative AI. And it's almost impossible now to tell whether or not a piece of digital data was created with the help of generative AI. You could, for example, digitally notarize a declaration against a human action, such as making a record of a declaration that I'm not using ChatGPT when submitting any piece of data. Then, even though I claimed I didn't commit piracy, I'd be liable if it was discovered. The data created by generative AI is pretty hard to come by, but we could still start this discussion with human actions, including what timestamps were originally doing.

Member: Web3.0 and generative AI, it was said that managing the originator is not very realistic, but is there any other discussion to bridge it?

Member: To put it simply, the advantage of a DAO is that it can reduce the cost and speed of creating a organization, so it is possible to consider launching a DAO in generative AI. If smart contracts and articles of incorporation are transparent, for example, it will be possible to create a DAO from a certain US DAO in a form that can be converted into a Japanese yen stablecoin in accordance with the Japanese context and Japanese corporate personality. In addition, I think that AI translation will also be able to translate culture, so it can be used in the governance field, which is currently in trouble due to DAO, such as changing the terms and conditions according to the Japanese context, governance of multilingual DAOs, and advancing conferences. In addition, this is more about uncertain AI and structure than generative AI, but I think it can be used to analyze what is happening on blockchains, analyze and consider relationships, data, and promises made transparent by Web3.0, and organize knowledge to make it into a organization form. At present, there is more awareness of creating an NFT in generative AI, but as an AI that operates in a system, if we consider it in terms of transparency and analytical capability, it will be very compatible with Web3.0.

Member: : It was very good to be able to confirm today as a follow-up meeting, but how do you intend to proceed with this meeting, the DAO, and generative AI, which is newly on the agenda?

Speaker: As for future moves, I would like to deepen consideration based on today's opinions, including the government-wide Web3.0 policies as I indicated earlier and how generative AI's story will be woven into them. Regarding the DAO, various projects are moving forward in detail with the addition of new members, so I would like to have the members see the situation as needed and report on it at some other opportunity. The future of this meeting has yet to be decided, and I would like to discuss the future of the meeting as a government policy after the discussions this time. I would like to consult with you separately about the handling of the meeting after that.