Make way, Zambian kwacha. There’s a hot new exotic currency on the market, only it’s not from any country on earth — at least not one in the material world. This currency is called the Project Entropia Dollar [PED] and it’s used to buy and sell goods on the planet Calypso, in an online gaming world called Entropia Universe.
The PED is among a growing number of alternative currencies changing hands in virtual worlds, social networks, and other Web sites eager to make it easier for users to spend money and carry out other transactions while online. “We’ll try to make the link between real and virtual world as close as possible,” says Hans Andersson, who in March was granted a license from the Swedish government to open Mind Bank, which will exchange Swedish kronor for PEDs. The game’s 1 million users now buy and sell land, minerals, and tools by depositing U.S. dollars or Swedish kronor directly into the game. Once Mind Bank opens in January, users will be able to link real-world checking and savings accounts to the virtual world. Eventually they’ll be able to take out PED loans.
Andersson hopes that as it becomes simpler to transfer funds from real-world financial institutions to those that exist on the Internet, site users will spend more time and money online. The difficulty of paying for goods in virtual worlds, online games, social networks, and even dating sites has long stymied growth in what analysts see as a burgeoning market. China’s virtual goods economy, the largest in the world, is worth $800 million and growing 30 percent a year, estimates Shaun Rein, managing director at China Market Research Group. In Second Life, one of the biggest U.S.-based virtual economies, transaction volume is expected to rise 39 percent, to $500 million this year,…