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Virtual currency proves real issue
Last Updated(Beijing Time):2007-03-09 09:48
China is stepping up efforts to regulate use of "virtual currency."

The move comes as concerns mount that the increasingly popular cyber money might pose a threat to the real-world financial system.

Virtual money was created by Internet companies to facilitate online payments for virtual items and services.

The government has banned the use of virtual money to buy real-world products and the practice of exchanging it into real currency - both growing businesses on the Internet.

The ban came in the middle of last month together with a halt on setting up new Internet cafes and enhanced regulation of online games.

Fourteen ministries were involved the changes, which became public knowledge this week when an official Website published the news.

The People's Bank of China was involved in the reform process and was urged to "enhance regulation of virtual currencies in online games" and "guard against any negative impact on the real financial order," according to a government notice.

"The virtual exchanges and e-commerce real-goods trading have to be strictly differentiated," the notice said.

It added that virtual money has become a hotly pursued item on the Internet, where major e-commerce sites have opened special trading zones for its exchange.

The most popular and "influential" virtual money is Q coin, created by China's largest instant messaging service provider Tencent Inc. Q coin was created for its online community and instant messenger QQ users to buy virtual items and services like cartoon icons, electronic greeting cards and games.

 

With a user base that reportedly takes in more than two-thirds of China's 140 million-odd Internet population, the Q coin has become an accepted payment method by many netizens and Websites.

Source:Xinhuanet 
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