SHANGHAI, July 2 — It's the hottest currency in China but it's not the yuan.
Known as QQ coin, it is China's most popular virtual currency which can be traded and exchanged for real goods.
The coins, produced by Chinese Internet giant Tencent, are so popular that they have sometimes risen sharply in value against the Chinese yuan, alarming officials at the central bank.
The buying and selling of such make-believe currencies used in online gaming has become so widespread that China fears it will affect the real economy.
To quell that threat, the authorities issued new regulations last week which restrict the trading and use of virtual money, including a ban on the exchange of online currencies for goods.
The rules represent the government's strongest effort yet to tame virtual money.
China is one of the world's biggest markets for multi-player online games such as World of Warcraft, and tens of millions of young people are believed to be trading virtual goods and credits for real goods and cash.
Last year, nearly US$2 billion (RM7 billion) in virtual currency was traded in China, according to the China Internet Network Information Centre. Some experts believe there is a much larger underground economy in the virtual world.
Most of China's big Internet companies, such as Sohu.com and Netease, have some gaming component and virtual currencies have grown up alongside many of them.
Smaller gaming companies have even set up what are called virtual sweatshops, cramped quarters where young people play online games to earn credits that the companies sell at a profit to customers in Taiwan, South Korea and the United States.
Telecommunications professor Edward Castronova from Indiana University Bloomington, who said he believes virtual currencies could threaten world economies, applauded Beijing's move.
“As virtual currencies take over more and more purchasing power, control over the effective money supply shifts from the central bank to the game developers,” he said. — NYT
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