The General Administration of Press and Publication of China (GAPP) recently released a draft outlining major changes in the regulation of in-game tokens within the online gaming industry. This marks a strategic shift in the country’s attitude towards digital currencies in gaming.
The new guidelines, which encompass 62 articles, propose a ban on the conversion of game tokens into physical goods, services, or legal tender. Companies must comply with stringent requirements, such as mandatory licensing in China, a two-year data retention policy, and the elimination of anonymous user registrations.
Article 23 of the guidelines pertains to the use of game tokens, with restrictions on their exchange for physical goods, services, or legal tender. This is complicated by the fact that cryptocurrencies are not recognized as legal tender in China. Additionally, game providers must adhere to new limitations on inducements and take measures against irrational consumer spending.
The guidelines are open for public consultation until January 22, 2024, allowing for feedback and possible adjustments before they become enforceable. According to DappRadar, the Web3 gaming sector has seen immense activity, with around one million unique active wallets daily over the past three months. These new regulations could heavily influence the industry’s direction, with Yat Siu of Animoca Brands predicting a potential surge in user engagement.