"A fixture in online gaming, virtual currencies are moving into other digital markets and may break into the physical world. But will acceptance costs and regulatory concerns stymie their growth?"After briefly mentioning the decentralized bitcoin and a previous centralized online currency provider, Karen Epper Hoffman provides some insight on potential challenges for the regulators:
"'Online gaming has been a key driver for virtual currency,' says Beth Robertson, payments research director for Javelin Strategy & Research, Pleasanton, Calif. 'But that's beginning to change because of the move to broaden the use of virtual currency... potentially even to physical goods.'"
"Government oversight could put boundaries around usage in individual countries. But since virtual currency, like the digital goods it pays for and the platforms on which it operates, is global in nature, it's hard to say if that alone would quell any risk."
"In developing a system where users exchanged different currencies for a virtual one, it had created an unregulated foreign-exchange marketplace."
For further reading:
"Facebook currency takes to the web", Paul Dantanus, October 25, 2011
"Getting the Goods on Virtual Items: A Fresh Look at Transactions in Multi-User Online Environments", Justin A. Kwong, William Mitchell Law Review, Fall 2011
"Virtual Currency and Social Network Payments – The New Gold Rush: How Emerging Virtual Transactions Will Alter the Payments Landscape Forever", Javelin Strategy, June 2011
Interesting to read the Javelin comments, and your own regarding the next big disruption being the "Revolutionary Payment Interface".
ReplyDeleteI work in real communities as opposed to virtual ones, and there is no money around. Our community reward card gives members of our community information and incentives that are personalised, timely and relevant.
We are working with the municipal authorities, retailers, sports clubs and transport providers to personalise the distribution of their goods and services.
For our members this means a more joined up experience. For the enterprise it means less waste which means more savings.
Slowly but surely we are beginning to distribute these savings back to our members (they get 90% the enterprise gets 10) but only in exchange for volunteering to do something that contributes to community life, such as shopping locally or volunteering for a good cause.
The exchange mechanism we use (that stores value) is called Plus Points. Smartcards transfer account balances and profile pages act as a sort of CV that make visible ones contribution to community thus our virtual currency is backed by contribution.
Payment interfaces and clearance systems that can deal with community currencies might well shake the market up. We shall see.
@mikeriddell62
Based on the fact that the Governments and central banks of most G20 countries are not printing enough money to sustain the levels of trade required to sustain basic human requirement in many communities, unregulated virtual currency exchange and the growth of complimentary community currency is not only inevitable, but essential to those hit hardest.
ReplyDelete