Virtual money poses a real threat

By Wang Xing and Wang Shanshan (China Daily)
Updated: 2006-12-26 09:27

However, Ala Musi, deputy director of the Legal Committee under the China Electronic Commerce Association, said that instead of bringing virtual money under the control of the real currency system, the PBOC would be more likely to expand the current currency system into the virtual world.

He said virtual money had emerged in recent years as a convenient payment tool for the consumption of online value-added services because e-commerce facilities and legislation process are lagging behind demand in China.

"I think the PBOC may release the regulation together with the Ministry of Information Industry and the Ministry of Commerce," he added.

Rather than waiting passively for the regulation, Tencent is striving to form an alliance between the Q coin and the currency system in the real world.

Last month, the company announced that it would co-operate with the Industrial Bank to launch China's first virtual credit card, called the QQ Show Card, which will be attached to a real card and can be used to prepay for online value-added services after being connected with a user's QQ number.

Last year, the company also launched a debit card called the QQ All-in-One Card in co-operation with China Merchants Bank. To date there are more than 1 million QQ All-in-One Cards in circulation.

Experts said Tencent's efforts to combine the virtual money payment system with real financial institutions would help the company ease the public anxieties and reduce its operational risk.

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