Facebook credits. My definition is a virtual currency. Here is Facebook’s definition. In all transparency: I know of them but have not used them yet. I have personally used Skype credits – and also Google credits – as well as participated in various virtual worlds and made use of those virtual currencies – so I have some understanding at least. All of these are basically re-purposed financial transactions given a virtual edge if you will. I read some of the history of virtual currencies, there have been many false starts, and some minor success stories like Linden Labs. But nothing on the scale of what Facebook might be able to do.
But Facebook Credits is different. Why? Because Facebook is the equivalent of the third most populous country in the real world, with over 500 million people around the world. Already, credits are becoming a money earner for Facebook in real cash.
So when this virtual currency (credits) begin to be used in non virtual situations what happens to real world currencies? How does the value of the credit relate to the item being purchased (swapped/bartered/traded?) How do Facebook Credits relate in price and value to the major currencies of the real world? Who will come up with this formula? If you buy Facebook credits in your home country, in your currency, then travel somewhere else and buy something what is the value of your credits? In which currency?
Already, “Virtual Currency Monetization” is it’s own tiny industry and growing very fast with a handful of start-ups and other companies chasing a market based on converting virtual “credits” to real money and or products. There are even companies touting themselves as “Virtual Currency Exchanges.” How long till the real currency exchanges push into this action? Facebook itself is advertising it’s partnerships with Rixty and Coinstar in supermarkets across the U.S to collect coins and convert to pre-paid Facebook credits debit card. So apparently the move to turn Facebook Credits into at least something like a real currency is already on.
Why this matters to Governments, Gov 2.0 specialists and practitioners, is pretty basic:
A. If a transaction is done in Facebook Credits for a real world item, what is the tax basis and who collects?
B. If a transaction is done in Facebook Credits that results in cash back – what currency denominates as the basis for a “Global currency?”
C. If and when Facebook starts to push to have it’s virtual currency become a real currency, what will it be weighted in? How will this affect real world currency fluctuations and global trading?
D. If Facebook successfully pushes it’s credits into the real world – will they be traded like other currencies? Who will regulate?
E. For all the Government agencies with “Facebook” like buttons on your properties? Did you know that you are part of a virtual economy? Are you tailoring your fee acceptance rules (ie check, cash, credit card) to include Paypal, Google checkout at the least, let alone Facebook credits? If not, why not?