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Jun 30, 2009



I understood that they are banning the purchases of REAL money and goods with virtual currency. The title of the news article by Informationweek is misleading.

I wrote a brief blog post about this:



They're trying to regulate competing currencies. Tencent's QQ coins were becoming another currency, in effect, with a surprising number of places accepting them as legitimate payment. As I said in the comments of Scott Jenning's blog, this is like the local 7-11 accepting Puzzle Pirate Doubloons to top off your cell phone's prepaid minutes.

The professional economists here can go into the reasons why China is eager to not have a competing currency to the yuan. ;)


On the boundary of 'virtual currency' in this new chinese regulation.

Original text:


My personal translation:

Online game virtual currency means a virtual exchange means that is

(1) published by online game operationg company,

(2) purchased directly or indirectly with legal tender(yuan) at certain rate.

(3) exist out of/different from game program,

(4) stacked by electronic way in the servers serviced by game company,

(5) represented as specific number of units.

Online game virtual currencies represent pre-paid recharge card,pre-paid amounts or points etc, but does not include items that was gained during game play. According to the provisions, Online game virtual items such as costumes, game coins, weapons etc, will not belong to the virtual currency.

IMHV, the target is not goldfarmers in WoW, but gamblers/money launderes using QQ coins.


The source of chinese document on this regualtion.



What's interesting here, to me, is whether or not China fears the use of virtual currency to circumvent its peg to other major world currencies. The relatively minute amount of RMT that takes place annually suggest that this is not an immediate threat, but financial innovation might lead to the creation of some sort of alternative currency, not subject to the normal constraints that governments exert on their national currencies. If this law was created to prevent such innovation, however, I would chalk it up to paranoia rather than good, common-sense central concentration of economic and political power. As an anti-vice law (either against gambling or money laundering), it seems rather more draconian than necessary.

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