The launch comes after a November ruling by the U.S. Securities and Exchange Commission that approved IMVU’s plan to enable payments in its virtual world through a blockchain-based cryptocurrency dubbed VCoin.
The Redwood City, California-based company wants VCoin to power the virtual economy in the metaverse, the universe of virtual worlds that are all interconnected, like in novels such as Snow Crash and Ready Player One. IMVU will be talking about this development at our GamesBeat Summit: Into the Metaverse event on January 27-28.
The SEC’s “no action” letter was a big deal. Other operators of virtual worlds — such as the game worlds of Roblox and Fortnite — could benefit from the ruling, so long as they follow the same guidelines that IMVU is, IMVU CEO Daren Tsui said in an interview with GamesBeat.
VCoin unlocks the full potential of IMVU’s virtual economy adding a robust services economy to its digital goods economy. Built on the widely-adopted Ethereum blockchain, VCoin is an ERC-20 token that can be exchanged both on the IMVU platform, and, for the first time, off the platform.
Available now for the IMVU desktop, mobile web, and web platforms, VCoin is seamlessly integrated into the IMVU experience, enabling secure, global peer-to-peer transactions at the click of a button.
IMVU has 7 million monthly active users who exchange 14 billion Credits a month and engage in 27.5 million monthly unique transactions. The market has more than 50 million products available today, with the catalog growing by 400,000 items a month.
With the addition of VCoin, users can now pay for goods and services on the platform — no complicated crypto wallets, or even bank accounts required — and then convert their earned VCoin into cash at an established rate.
Having something like VCoin is important because the metaverse isn’t expected to be a single world operated by a single company. It will likely be a collection of virtual worlds, all interconnected in a way that makes travel between the worlds easy and seamless. If you buy something in a virtual world from a company or from another user, you want to be able to trust that transaction and take the object to another world. If you sell an item, you want to be able to get paid and then cash out. And from the viewpoint of companies, creating a marketplace where users can supply the digital items could be far easier than one company’s own developers trying to populate a metaverse full of digital items.
That’s what IMVU is doing with VCoin, a blockchain-based digital currency backed by a massive user base (Ethereum) and thriving economy, soon to be launched in the IMVU platform. Blockchain is the transparent and secure digital ledger that allows objects to be uniquely identified and ownership of those objects to be clear. Blockchain technology is the foundation of cryptocurrencies, which are digital forms of money that are being created by all sorts of companies. Ethereum has become popular in part because of its unique features (such as the ability to create smart contracts or set specific rules for the use of the currency) as well as its broad-based support.
Before VCoin, to get paid, users had to use third-party tools like PayPal or Venmo. But that’s not easy with users in different countries. With VCoin, paying will get easier, Tsui said. Users can send VCoin to anyone else on the platform, and earners will be able to convert it to real cash via Ethereum cryptocurrency wallets.
Currently, numerous companies have their own proprietary payment systems, but those are limiting. Their currencies only work on their own platforms, and turning that currency into cash is quite difficult. Policies limit how often you can cash out currency or maximum amounts. To transmit money across states, service companies need to have licenses for each state, similar to a business like Western Union. The same goes for international money transfers.
The SEC had to decide whether VCoin was a security, like a stock sale. If it had classified it as such, it would have required a lot of disclosures as required of public companies, such as selling only to accredited investors who are knowledgeable about what they are doing and have a certain net worth. But for the third time in its history, the SEC issued a “no-action letter,” which meant that it won’t take regulatory action against IMVU for the VCoin currency.
VCoin will be sold at 250 VCoin for $1 or $0.004 per VCoin. Users can purchase, transact and earn VCoin on IMVU and easily transfer VCoin off the platform to an open digital wallet, send to any ERC-20 wallet, or convert it to fiat at the original purchase price less a transaction fee.
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