Responding to the RBA's call for submissions relating to innovation in payments systems, Microsoft points out that virtual currencies have some key advantages driving their adoption including the removal of the cost of multiple card processing interchange fees for low value or micro-transactions.
"While these systems are generally closed at this point of time, it is foreseeable that consumers may desire in the future to exchange value between the various schemes and that they could well become more widespread and prevalent within online retail environments," Microsoft says.
That's an important thought. Credits and tokens, even when purchased with real world money, now can be used only within a closed application, typically a game. What Microsoft and many others seem to believe is that demand will grow, at some point, for methods to convert such virtual currencies into real-world currencies. And the regulatory scrutiny already has begun.
French courts are being asked to define the status of the virtual currency Bitcoin, after local banks switched off accounts for exchanges handling the currency on the presumption that Bitcoin should conform to electronic money regulations.
At the moment, Microsoft Points are not convertible to a monetary equivalent, but are used solely to gain licenses to digital products. However, implicit in its submission to the RBA, Redwood is clearly looking to a future in which the store of value inherent in Points can be used for transactions beyond the XBox Live and MSN community.
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