China Virtually Clueless

Oh dear:

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.

Virtually a Real Currency

And so the line between what is a "real" and "virtual currency" blurs yet further:

Tencent, QQ.com's parent company, is being sued by an angry user for impersonating a friend and getting him to link through to a contest site. Damages sought: 40,000 Q coins, and 445 5-digit QQ numbers (see previous post on the value of QQ numbers). Is this the first time that a court of law has been asked to award virtual currency in a settlement? It all points to the way that Q coins are increasingly being used as an alternative to the [Chinese] RMB for online economic transactions. It makes sense, given that a) so few Chinese have credit cards with which to pay for online goods and services; b) the vast majority DO have QQ accounts and Q coins with which to purchase online goods and services; and c) You can accumulate Q coins by playing online QQ games.

The post also links to this useful introduction to the world of QQ coins.

China's Virtual Money Woes

It's spreading:

As if Chinese leaders did not have enough of a headache trying to manage the country's rising but still undervalued currency in the testy world of international trade, now the growing popularity of virtual money enters the already complex equation.

The so-called "QQ" coin - issued by Tencent, China's largest instant-messaging service provider - has become so popular that the country's central bank is worried that it could affect the value of the yuan. Li Chao, spokesman and director of the General Office of the People's Bank of China (PBOC), has expressed his concern in the Chinese media and announced that the central bank will draft regulations next year governing virtual transactions.

So tell me again the difference between real and virtual currencies....