Chinese Yuan No Longer The Only People's Currency
from the more-effective-than-angry-trade-reps dept
One of the chief policy concerns for the Chinese government, in recent years, has been the value of the national currency, the Yuan. The government is convinced that for the time being, it must artificially manipulate its value, so as to preserve the robust economy. But while it can intervene to affect the Yuan, it has little control over alternative currencies, such as those found online. It's apparently concerned that an online currency called QQ, maintained by a large IM system, could induce unwanted, real-world volatility, as people start using the QQ as a substitute for the Yuan to buy certain goods and services. For the most part, it's hard to imagine that this could be too destabilizing. It's mainly for the purposes of international trade that China wants a stable Yuan, and it's unlikely that too many manufacturers will start accepting payments in QQ. Still, the Chinese government tends to feel threatened anytime people are able to express themeselves spontaneously, in some manner outside of endorsed channels, hence the constant internet censorship. It wouldn't be a surprise to see it take a similarly confrontational stance towards alternative currencies. The legal implications of virtual worlds and currencies are just starting to be debated in the US; it should be very interesting to see how things differ when the anarchic freedom found in them collides with stricter societies and economies.
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The Absurd
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Play Money?
"I can no longer sit back and allow Communist infiltration, Communist indoctrination, communist subversion, and the international Communist conspiracy to sap and impurify all of our precious bodily fluids."
After the Chinese (and WalMart) complete their process of "helping" us turn our own currency into the "play money" that it's becoming, can the purity of our (precious) bodily fluids be that far behind?
As a country with a 5000-year history, they can be quite patient.
LM
Peace on Earth
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Virtual...
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Real vs. Virtual
Direct deposit is great, I use it, but it requires a leap of faith because it deals in the concept of money rather than actual coins and bills.
As long as the currancy can be freely exchanged it doesn't matter if it is Yuan or Dollars in your bank, or Linden Dollars or WOW Gold, it is all the same, and none of it is real. Embrace the change and get over the loss of real money.
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Microcurrencies
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The easiest and most effective way to prevent counterfitting is cryptography (which, in China and until recently most of Europe, I admit would not necessarily be easy). QQ is an entirely electronic money (at least that's the impression I got) and so would be fairly easy to prevent counterfitting.
If they ever moved into physical money then they would use the same techniques that governments currently use: make it so hard and expensive as to be not worth it to counterfit it. Frequently changing the parts of the money that make it so hard to copy would also increase security. For instance you could give a lengthy timeframe to change your old money for new, say a year, and verify all the old money being changed so as to keep in circulation only fairly current versions of the money.
The goal would be to make enforcement as easy as requiring verification before accepting a transfer of funds. We already do this here with government issued money. Sales clerks check that that little strip is in the $100 bill and ATMs and banks use encryption to verify all money transfers as genuine (it uses a crappy key in some cases, pin #s, but the underlying system is still there).
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A fairly bloody massive one, I'd say:
http://www.alexaholic.com/qq.com+skype.com+icq.com
*Everyone* on the internet in China uses QQ.
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In regards to The Absurd's comment
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