I found an article pointing out that the virtual worlds that we are fascinated with as sandboxes for digital money experiments could be used by money launderers to move illicit cash and convert that cash into “real” money. The article further notes that banks may be guilty of money laundering if they “facilitate” deposits or payments in these virtual worlds, because there is no due diligence on players. I wonder what will happen to the population of World of Warcraft or Second Life if the government insists that you have to present an old gas bill and a video rental card in order to play online. More regulation is on the way, I would think, so presumably organisations with experience of dealing with that kind of regulation (let’s call them for sake of argument, “banks”) would have an advantage.
Meanwhile another virtual world, project Entropia, is about to adopt an alternative regulatory regime for banks: auction banking licences to the highest bidder. Successful bidders will be afforded the opportunity to help design and name their own virtual bank buildings, and offer banking services directly through avatars. So not only will a a new money market come into existence, but the participants in that market may not be “conventional” players. We have to spend some time talking about this at the 2007 Digital Money Forum: fortunately, Second Life have agreed to come along and present so that should get the discussion going..
My opinions are my own (I think) and are presented solely in my capacity as an interested member of the general public. [posted with ecto]