China Bans Virtual Currency
Will QQ take the hit?
Chinese Ministry of Commerce has unveiled the first official rule on the use of virtual currency in the trade of real goods and services to limit its possible impact on the real financial system. According to the press release, Since 2007, virtual money trading has drawn official attention, with the government demanding tighter controls as such trading became an avenue for gambling and illicit trade. The most popular Chinese online credits are “QQ coins” issued by Tencent. com, which has at least 220 million registered users. In a media statement Saturday, the company said it “resolutely” supported the new rule. The statement said Tencent had strongly opposed the underground trading of virtual money, which could enable online theft and fraud. The company would work with the authorities to combat online crimes, according to the statement.
Inside Social games blog says that this decision, possibly influenced by the recent case in which virtual currency extortion led to three years of prison, is expected to affect millions of people in China who make part or all of their living through such means. Dubbed “gold farming†by many, a vast number of companies hire people to play MMOs for the sole purpose of collecting large sums of virtual currency and selling them to other players. In turn, however, those “farmers†inflate and usually adversely affect in game economies. While this is a significant win for many game companies that fight against these services, the reasoning behind the ban is not necessarily because of their complaints, according to the Chinese government.
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