Journal 13, July 1

http://www.nytimes.com/2009/07/01/technology/internet/01yuan.html?_r=1&ref=technology

The increase of virtual currency trading in China has government officials scared and making moves to limit the activity in the country. Currently, China has the largest market in the world for such games as Tecent, World of Warcraft and other interactive platforms that have virtual currency features. These games allow participants to accrue, trade, and even purchase real items such as food and clothing with this virtual currency. Close to $2 billion dollars worth of virtual currency was traded last year alone in China.
The government is concerned because they feel that the increased popularity and value of virtual currency can affect the economic state of real currency. At one point, virtual currency was valued at more than the Chinese currency, the renminbi and Chinese officials were worried that this virtual worth could degrade the value of real money in the country.
Interestingly enough, online retailers are feeding into the virtual marketplace. E-markets such as eBay and Taobao sell World of Warcraft virtual gold coins and swords. China has taken action by banning real goods being bought with virtual currency. Evidently, virtual currency however, holds true weight among users. Reportedly, a man in China was sentenced to prison for beating up a man in a café and demanding him to turn over virtual currency and valuables in value of $14,750. It is ironic how intangible goods now have society taking tangible action. Even more intriguing is the fact that clandestinely, we have been using virtual currency since the inception of online banki ng. However, as a new threat comes into town, governments are raising eyebrows at the true implications of this new phenomenon predicated by gaming technology.
The regulation of virtual currency in China comes at a tense time however where China has been criticized for its proposed national implementation of filtering software on all computers sold in China. This filtering software would block pornographic and other unhealthy sites. While China is making a bang-up effort to thwart the control of money by programmers, it is interestingly ironic how the government can become scared over money that isn’t real and even outwardly showing it through deeper restrictions to protect their control.


Sources:
http://www.pcworld.com/article/165447/china_sentences_virtual_currency_extorter_to_prison.html

http://www.china.org.cn/english/business/239421.htm