Worried that virtual currencies from online games could undermine the country’s financial system, Beijing has taken steps to restrict their conversion into yuan and use to buy real goods, and banned the opening of new Internet cafés.
Beijing is struggling to rein in the hot money flushing around of the country, hoping to keep the yuan from appreciating too fast against the dollar.
The measures against virtual currencies, announced by China’s state news agency Xinhua in a joint communiqué by 14 government agencies, were said to be aimed at preventing them from wreaking havoc on the real-world economy.
Titled, “A notice about further steps in strengthening the management of Internet cafés and Internet gaming,” it says that the redemption of virtual currencies in value exceeding their original purchasing prices will be banned to prevent attempts to realize profits. It also says they cannot be used to buy real goods, only virtual products and services provided by the gaming operators who issue the currencies.
Which means, of course, that as well as being virtual, all this dosh will now go undergound, making it even harder to control.
08 March 2007