World's First Virtual Banking Licenses

An anonymous reader writes to mention a new, unique situation in Massively Multiplayer games. The Entropia Universe title has broken new ground by being granted five virtual banking licenses. These are exactly what you think they are: in-game bankers can transfer Entropia funds directly to your real-world bank account as real world cash. The well-known conversion rate between EU cash and real money allows this; more entertainingly, you can withdraw RL cash into EU notes via the banks as well. From the article: "These two-year exclusive licenses will be available through the public auction within Entropia Universe and will be open for bids beginning mid January 2007. Entropia Universe is the only virtual universe on the internet whose currency has a fixed exchange rate with the US Dollar. Its currency can easily be moved between Entropia Universe and the real world using an ATM card. The Entropia ATM card can be used to instantly withdraw real cash from over 1 million ATM machines worldwide"

Re:Very interesting because

[Rosco P. Coltrane]

So much for our love for democracy... If that is not the ultimate super absolute dictatorship..

The form of government has nothing to do with statehood: North Korea is a state, so was the USSR.

Money Laundering

[cbuskirk]

Its only a matter of time till outfits start attempting to launder money thru virutual economies.

The concept of virtual currency exchange is flawed

[Anonymous Coward]

because by definition, the virtual resources to which a virtual currency is pegged have no natural limit or constraint. This is an identical situation to physical paper currencies being printable without limit --- a recipe for astronomic inflation because food and other physical resources within a country obviously have limits, so the relative value of a unit of printed currency goes into freefall.

The same applies in respect of exchange rate with foreign currencies. A fixed exchange rate with the dollar makes zero sense, given that the virtual resources and hence virtual currency in the virtual world are not fixed, whereas the value of the dollar is fairly strongly tied to physical resources. Even though the dollar and most other physical currencies lost their direct ties to the gold standard many decades ago, they are still rock-solidly dependent on physical wealth in a less direct fashion.

You can't have a fixed-length rod attached to two objects that are moving, both unstoppably, and out of sync with each other. And these two can't be in sync, since their motive forces aren't related.

Inflation / Deflation

[ADRA]

Can't say much about the game, but how do they -peg- RL currency to the entropia currency? If the US dollar goes up 10% does that mean that the developers all of a sudden are 10% less profitable? Or, is there a system in the game to handle currency volitility? Can one simply hold entropia dollars then sell them off when the dollar is high? Is there a transaction penalty? Ah, too many questions, too little time.