Virtual money worries

Chinese authorities have acted to curb the spread of virtual currencies into the real economy. The FT reports on a recent formal notice from the government and central bank effectively banning the use of virtual cash to pay for material goods and services in the real world. The edict was issued in response to the growing popularity of Q-coins, the virtual currency tokens created by Hong Kong-based gaming outfit Tencent. 

The question of how best to deal with virtual currencies is likely to become more pressing for Western Governments too, as both Microsoft and Yahoo! step up their own efforts in this area.  The Microsoft points system I’ve already blogged about here.  

Now it appears Yahoo! is also getting in on the game with an experimental new currency it has dubbed Yootles. The initial interest rate for Yootles will be set to 5.375%. Yahoo will play central banker to its currency and is keen on controlling inflation.