Another new development is the virtual currency world is the creation of currency exchanges such as Currency Connect. Working in a similar way to real-life FX systems, these sites give customers the ability to exchange the virtual currency of one site (e.g. Facebook credits) for those of another (e.g. IMVU credits) and thus make the virtual market more interoperable. Potentially this could create a true rivalry to cash as the system is oblique while essentially supporting transition of cash outwith the financial system (as do bank notes). There is also scope for new virtual FX traders to appear with the potential to make revenues from virtual currency trading and return of these currencies to natural currencies – for example, 15 Facebook credits cost 1,11 EUR in Belgium, yet 1,50 USD, which at today’s exchange rate (from oanda.com) is 1,12 EUR – OK, it’s not a stunning difference, but in volumes it could be significant. And perhaps more interesting for the traders, this is as yet unregulated territory…
“I do not really see how virtual currencies can be a potential rival to virtual currencies, as the latter is only to be used in an online environment where cash has no role (electronic money on the other hand is). Is am I making a vocabulary mistake here, as cash being real money?”
big issue in China with Tencent QQ coins was that they were orignally designed for buying virtual and digital goods within the Tencent environment (avatar items, ringtones, funky icons…) but people started selling, for example, virtual mobile phones, which they then shipped as physical goods (and other more illicit items allegedly) so payment was made using the virtual currency. QQ coins were tied 1:1 with the remnimbi which made trade easier and kept the transactions invisible to the authorities (particularly tax!).
- Making real money with virtual roses (terranova.blogs.com)
- When Virtual Markets Crash (andrewsullivan.thedailybeast.com)
- Virtual economies distribute world wealth, attract real criminals (english.ruvr.ru)