Back to ducks… it has been argued that virtual items (including gold pieces, credits etc) might look so much like property that they would be considered to be property. Certainly they are used as if they were.
When it comes to money the EC has provided a handy definition of exactly what it considers e-money to be and hence what organizations it feels it has to regulate, but what if people even worse that eBayers start to utilise virtual goods to move value around the world?
In the snappily titled Directive 2000/46/EC of the European Parliament and of the Council of 18 September 2000 on the taking up, pursuit of and prudential supervision of the business of electronic money institutions Official Journal L 275 , 27/10/2000 P. 0039 – 0043 (.pdf). The EU defines e-money as:
- 3. For the purposes of this Directive:
(b) "electronic money" shall mean monetary value as represented by a claim on the issuer which is:
(i) stored on an electronic device;
(ii) issued on receipt of funds of an amount not less in value than the monetary value issued;
(iii) accepted as means of payment by undertakings other than the issuer.
In the UK this Directive is starting to hit mobile operators as premium rate SMS messaging, a neat micro-payment solution, looks like it is going to fall under the directive. This means premium SMS providers look like they we be considered to be just like banks, which slams them into whole set of regulation. Regulation that has recently become even more complex as paranoia about terrorist money laundering increases.
Looking at the wording of the directive your virtual gold piece of light sabre seems like it falls outside the e-money definition – others may disagree with this of course. However, virtual items might provide a neat way of moving value around the world for fair means of foul - which could get all kinds of people interested in virtual worlds.
Ren,
You might make a good criminal yet...
On a more serious note the current volume of trade between RW currency and VW currency is too low for this to become a major opportunity. In a past thread I threw out a total market volume of $30-40 million world wide and Ted agreed.
I am not sure how much bad money you could hide in that stream but its not very much in the great scheme of things. If you started trading big volumes, millions of US dollars a day or more you would become the market and that would cause all sorts of strange things to happen some of which could cost you a lot of money and reduce your chances of staying hidden.
It is a clever idea, I just don't think the market is large enough to support it, yet.
Posted by: Tom Hunter | Apr 30, 2004 at 11:49
>It is a clever idea, I just don't think the market is large enough to support it, yet.
A case for a regulatory crackdown now before anyone even gets the chance to be bad then.
>You might make a good criminal yet...
Well I often work in marketing
Posted by: ren | Apr 30, 2004 at 12:10
"A case for a regulatory crackdown now before anyone even gets the chance to be bad then."
That might sound good to a politician, but would be disasterous for developers. If virtual items and currency are suddenly designated as governmentally recognized currency, customer service will look like a small hobby on the side compared to complying with financial regulations. Customer background cross-checks, serial #s for platinum, transaction reporting to the government, etc. And then there's the larger issue of developers being required to maintain a relatively stable value...
And you know what would come a half-step behind (or before) such regulation? Income Tax. What better way to remove all the fun of VWs, I can't imagine...
Posted by: Euphrosyne | Apr 30, 2004 at 12:52
On the other hand, developers would finally be able to "print" money! ;-)
Posted by: Ian McGee | Apr 30, 2004 at 12:57
" (ii) issued on receipt of funds of an amount not less in value than the monetary value issued;"
It seems most game's data do not fall into this category for at least number 2, since it was not issued on receipt of funds. This seems to indicate that if you want to go the "Print your own money" route like Project Entropia you would need a money transmitter license and a whole lot of regulatory compliance overhead.
Posted by: DivineShadow | Apr 30, 2004 at 14:13
"(ii) issued on receipt of funds of an amount not less in value than the monetary value issued;"
What about the case where you buy platinum off eBay, or better yet, the few VWs where you can buy currency from the developer? That is clearly within the letter of (ii). This doesn't mandate the funds be issued directly from the issuer--just like I dont get my paycheck from the US Treasury--merely that it represents a "claim on the issuer". That seems to be the only debateable point left, since (iii) accepted as means of payment by undertakings other than the issuer certainly applies to other individuals and third-party resellers.
So, when I go to upgrade my magical sword from another player, does the value of my platinum represent a claim on the developers, or is it only a claim on the fictitious VW government? This would seem to be the best line of defense for developers who don't want to be regulated; basically a variant on the "only a game" position. But that standpoint won't hold in the long term.
For the legal theorists out there: what are the odds that in the future, VW governments (or even the VW itself as a conceptual whole) could become RL legal entities, similar to corporations? Some problems could be avoided (and several others created) by RL law declaring the VW government to be the issuer of funds--regulated or not--rather than the developers and production company.
Posted by: Euphrosyne | Apr 30, 2004 at 14:54
Euphrosyne,
"What about the case where you buy platinum off eBay, or better yet, the few VWs where you can buy currency from the developer?"
IMHO, Those are two different scenarios...
First: You can buy refrigerators on eBay and that doesn't turn them into monetary instruments. You can buy Pokemon collectible trading cards on eBay and that still doesn't make them montary instruments. A Pokemon card or a refrigerator does not represent a claim against the original issuer. Nor does a digital version of the same. Unless, of course, it is issued as such.
Second example: Buying your game tokens (currency or whatever) online is also *not* a claim on the issuer. The game There, VZones and many others would not be at risk here. That people trade these things like currency creates a barter economy, not a claim on the issuer. If you buy a There hoverboard, and later sell it to Joe, Joe can't go back to There and ask the developers to deposit the funds you gave There into his bank account. The Hoverboard was never a claim against the issuer, nor are Therebucks.
What would need to happen to run afoul of this is if you (or anyone) were able to claim the money deposited with the game developer. Much like in Project Entropia. And what happens with the SMS buying is that it really is a money instrument. Suppose you load your cell phone with $10, but the issuer (your cell carrier) doesn't ever refund you, yet allows you to purchase something with those $10, now the recipient of that digital token, or the reciepient of the transaction in the carrier's computer systems holds a claim against the carrier for $10. Bingo! Go to Jail, do no pass Go. If no-one was ever able to claim your $10 from the developer, then all is fine, the moment it represents a claim against them, they're in trouble.
Posted by: DivineShadow | Apr 30, 2004 at 18:30