Virtual Currency In China Is A $2 Billion Economy

2003 9 27 china money1

The Chinese government is a little worried about how much virtual cash is being traded in the country, The New York Times reports.

In fact some virtual currency, like the QQ coin, is actually affecting the market for the renmibi, China’s actual currency.

Much of the $2 billion in virtual currency is used to play games, but significant chunks, David Barboza writes, are now being traded for real physical goods, like clothes, food and services.

The shift of using virtual currency to pay for real products is part of what’s freaking out the Chinese central bank.

Beijing is so concerned about the virtual life of its citizens that the Times says, “it has repeatedly sought to tame the online gaming market with new regulations (and even Internet addiction camps) but the activity continues to grow.”

Here in the states the virtual gaming market is starting to undergo a similar boom. Zynga, creators of the Mafia Wars Facebook game, is due to rake in somewhere north of $100 million this year on its virtual offerings.

Competitor Playfish has seen 100 million installs of its games in little more than 18 months.

Both companies handle payments on their own or through third parties right now, but Facebook sees a revenue opportunity in managing payments and virtual currency in third party applications by itself, having recently rolled out Pay with Facebook in a limited trial.

No word yet on how concerned the Federal Reserve is with this latest development.

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