On Money and Magic

Abstract

“The Bank will strengthen management of the virtual currencies used in online games and will stay on the lookout for any assault by such virtual currencies on the real economic and financial order.” When the world first heard of virtual currencies in the early years of this century, some speculated that there might be a future blending of economy between the real and the virtual. That future came sooner than expected; the statement above was issued by the Bank of China in February 2007, in reaction to a genuine monetary shock produced by the virtual currency QQ Coins.

Keywords: Money, Virtual Currency, Cryptocoins