Fandom

The IT Law Wiki

Non-convertible virtual currency

32,181pages on
this wiki
Add New Page
Talk0 Share

Ad blocker interference detected!


Wikia is a free-to-use site that makes money from advertising. We have a modified experience for viewers using ad blockers

Wikia is not accessible if you’ve made further modifications. Remove the custom ad blocker rule(s) and the page will load as expected.

Definition Edit

Non-convertible virtual currency (also called closed virtual currency)

is intended to be specific to a particular virtual domain or world, such as a Massively Multiplayer Online Role-Playing Game (MMORPG) or Amazon.com, and under the rules governing its use, cannot be exchanged for fiat currency. Examples include: Project Entropia Dollars; Q Coins; and World of Warcraft Gold.[1]

Overview Edit

It should be noted that even where, under the terms set by the administrator, a non-convertible currency is officially transferrable only within a specific virtual environment and is not convertible, it is possible that an unofficial, secondary black market may arise that provides an opportunity to exchange the "non-convertible" virtual currency for fiat currency or another virtual currency. Generally, the administrator will apply sanctions (including termination of membership and/or forfeiture of remaining virtual currency) to those seeking to create or use a secondary market, contrary to the rules of the currency.

Development of a robust secondary black market in a particular "non-convertible" virtual currency may, as a practical matter, effectively transform it into a convertible virtual currency. A non-convertible characterisation is thus not necessarily static.

References Edit

  1. Virtual Currencies: Key Definitions and Potential AML/CFT Risks, at 4.

Source Edit

See also Edit

Also on Fandom

Random Wiki