The General Administration of Press and Publication (GAPP) of China has released a draft guideline aimed at curbing the integration of in-game tokens with physical goods and legal tender. Announced on December 22, this directive specifically targets the online gaming industry, proposing a ban on converting game tokens into real-world assets or fiat currency.
Spanning 62 articles, the guideline addresses various aspects of online gaming regulation. It stipulates stringent requirements for gaming companies, including the necessity to secure a license in China, maintain customer data for a minimum of two years, ensure content aligns with state and socialist values, and eliminate anonymous user registration.
One of the key focus areas, outlined in Article 23, is the regulation of in-game tokens. The draft aims to prohibit their use for purchasing physical goods, services from other entities, or conversion into fiat currency. The lack of specific mention of cryptocurrencies in the guideline, coupled with the fact that cryptocurrencies are not considered legal tender in China, leaves open questions about their inclusion under this rule. Essentially, the GAPP's move appears to be an effort to disconnect the online gaming economy from the broader real economy.
Additionally, the guidelines propose restrictions on gaming companies offering incentives like sign-up bonuses or daily login rewards. These companies are also urged to implement recharge limits for users and provide warnings to curb irrational consumer spending behaviors.
Currently, the guideline is open for public consultation and has not been legally enacted, with the deadline for feedback set for January 22, 2024. In the context of this development, data from DappRadar shows significant engagement in Web3 games, with about 1 million unique active wallets participating daily over the past three months. Yat Siu, the co-founder of Animoca Brands, anticipates this number could skyrocket to 100 million by next year, highlighting the growing intersection of gaming and digital assets.
