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In an article at ars technica there is talk about the South Korean Government hoping to pass a law that controls the exchange of virtual currency.
A controversial bill proposed by the Ministry of Culture and Tourism in South Korea aims to control the exchange of virtual currency. Described by the deputy director of the mMinistry's Game Industry Division as an attempt to "tighten regulations on hazardous gambling activities," the bill would prohibit the sale and purchase of virtual currency, but would not impose controls on item trading.
In recent years the phenomenon of gold farming has grown dramatically. As online role playing games with complex internal economies grow, so too do the number of companies that are looking to cash in on these new virtual economies. It turns out that some gamers are quite happy to pay real world money for in-game currency and/or items, and this has created quite a stir amongst gamers and politicians alike.
The South Korean bill has received strong support from some in the game industry, particularly companies that run multiplayer Internet games in which the commercial exchange of virtual currency can potentially disrupt balance and competition. On the other side of the issue are gold-farming companies that serve the growing market for virtual currency. An article in The Korea Times cites statistics from the country's Game Development and Promotion institute, which states that the size of the virtual item exchange market is roughly $1 billion and estimates that approximately 60 percent of item trading company profits come from gold farming.
As gold farmers are quick to point out, prohibition will not decrease the market for virtual currency, and somebody will always emerge to take advantage of it. Prohibition, anyone? By imposing penalties on virtual currency exchange, the Korean government will deprive native companies of access to a rapidly growing, $1 billion dollar market that will still be serviced by foreign companies. Many MMORPG developers already have policies forbidding the commercial exchange of virtual currency, and some might question if it is fair to the tax-paying public to shift the costs and burdens of enforcing those policies to the Korean government.
The bill is also relatively vague about what actually constitutes virtual currency. One wonders if this proposed prohibition would criminalize games like Second Life in which commercial transactions are a fundamental aspect of the experience.
As usual, this is probably a case of overly-concerned politicians trying to control what they don't understand. As a result of the growing controversy, the bill has essentially stalled while the debate continues. Like most other sectors of the technology industry, gaming is versatile and dynamic--a combination that makes it difficult to regulate. As trends change, anachronistic laws can become impediments that stifle progress. In order to prevent stagnation, Korea's legislators may have to depend on the invisible hand rather than an iron fist.
Read more here.