The General Administration of Press and Publication of China (GAPP) is taking steps to tighten regulations on in-game tokens within the online gaming industry. On December 22, the GAPP released a draft of new guidelines, proposing significant restrictions, including the prohibition of using game tokens for purchasing physical goods or exchanging them for legal tender.
The draft guidelines encompass 62 Articles, addressing various aspects of online game regulation. Key proposed measures include:
Licensing Requirement: Companies would need to secure a license to operate in China.
Data Storage: Firms must store customer data for up to two years.
Content Compliance: Games must adhere to national and socialist values.
User Registration: The guidelines aim to eliminate anonymous user registrations.
Article 23 specifically targets the use of game tokens. It suggests banning their use for buying physical goods, exchanging for services or products from other entities, or converting into legal tender. This point is particularly noteworthy given that cryptocurrencies are not recognized as legal tender in China, and the guidelines do not explicitly mention “crypto.” The intention seems to be to prevent online game economies from having a direct interchange with the real economy.
Additionally, the guidelines aim to curb certain practices by game providers, such as offering incentives for registration or daily logins, and require them to implement user recharge limits and warnings against irrational spending.
These guidelines are currently open for public consultation and have not yet become legally binding. The consultation period is set to end on January 22, 2024.
The context of these regulations is significant in the broader landscape of digital and Web3 gaming. According to DappRadar, around a million unique active wallets engage in Web3 games daily over the past three months. Yat Siu, the co-founder of Animoca Brands, a gaming and venture firm, suggested in a December 17 interview with Cointelegraph that this number could potentially increase to 100 million in the following year, indicating the growing interest and participation in this sector.
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