Virtual Banking (16): Keytrade

Upon posting the update RL Brand Directory for Second Life just before the weekend, I received a number of tips on Belgian firms from my pal Pieter Bosch over at the Second Life Crew blog. One of them was already on my to do list, the Keytrade Bank. So, moving from Italy's Banca Carige to Belgium's Keytrade Bank would be a nice contrast.

The Belgian Keytrade Bank is an internet bank and is a 100% subsidiary of Crédit Agricole, also present in Second Life and blogged here at MindBlizzard in summer 2007.

Belgium's first online investment site VMS-Keytrade, saw the light of day in 1998. It experienced immediate success and dazzling growth. In 2002, VMS-Keytrade became Keytrade Bank and acquired its banking status by taking over RealBank.

Today, Keytrade Bank is part of the Crédit Agricole Group, one of Europe's largest banking groups (total assets of € 913 billion and own funds of € 66 billion).

The bank's build is quite simple: One main office at a small island, a little gardening to liven up the terraforming and that's it.

On the inside, there's a difference though. It's quite spaceous, with several seats and small offices filled with Scope Cleaver design.

Upon entering you cannot miss the sim's prime feature: The exchange. This is one of the first actually usefull features I've seen in visiting 16 banks and various financial corporations in Second Life as it gives a live exchangerate of the Linden Dollar against various currencies.

Aside from the live exchange, you'll find some freebees (T Shirts) and a nice Zeppelin to fly over the island. We're not done yet. Among the freebee stands, there's another usefull tool to be found: A HUD which also gives you the conversion rates plus financial news

"KEYTRADE BANK and DOW JONES NEWSWIRES launch on Friday the 23rd of November 2007 a NEW second generation Financial NEWS and Currency Conversion HUD in Second Life.This second generation HUD features besides the currency converter with Real Time currency conversion rates of 12 different currencies in relation to Linden $ now also Real Time FINANCIAL NEWS from DOW JONES NEWSWIRES.The NEWS are accurate financial breaking news and headlines, together with rolling commentary and in-depth analysis.With a click of a button on the Keytrade Bank
HUD a stylish news screen slides out of the HUD and displays more than 2000 characters of financial NEWS.The slide screen displays the NEWS with a Headline and date. You can further browse the NEWS feed by simply clicking on the page arrows." (SL Newspaper BNC)

Although I can't say the build is spectacular, the HUD and exchange make up for it as this actually is a serious attempt at connecting the RL and Virtual markets.

SLURL: http://slurl.com/secondlife/Keytrade%20Bank/128/128/0

The value of Virtual Money

The dust seems to have settled on Linden Labs recent 'Banning of Banking Activities'. A long overdue statement by Linden Labs who have taken a stance against malicious scammers, some who have managed to acquire over 700.000USD in two to three years. Several banks have protested, as well as several clients and residents. Casualties of this decision by claiming to do fair and honest business, or just general concern to get their money back.

But what caused the most controversy in my opinion is the fact Linden Labs seems to have acted as a 'Network Overlord', ruling law between citizen disputes. In earlier 'bannings' many felt Linden Labs hand was forced by long existing, international real world laws, such as the gambling policy and the stance against 'ageplay'. Dramatic extrapolations of this decision to ban banking speak of moral policing, where Linden Labs as owner of Second Life begins to seriously force their own values on their users resulting in the following question: Is Linden Labs policing citizens, interfering with things that aren't their concern in the spirit of free economy?

I don't think they did, I think they struck first at a potentially very dangerous, juridical situation, and here is why:

The value of the Linden Dollar

Just because the residents of Second Life pay money for their virtual 'credits' doesn't make in real money. You won't be able to exchange it outside the realm of Second Life, or Second Life related websites, its value is bound to the laws of its software (or rather its popularity), and it has a lot more flexibility than a real currency. But the Linden Dollar has more resemblance to real currency than any other 'gaming money'. It can be bought and redeemed at variable costs, based on supply and demand. There is an overseeing institution and it can buy services, even products not related to the software (Second Life) itself. But even though the Linden Dollar has some properties to qualify for a real currency - its not in the eyes of the current juridical system. So why then, would Linden Labs be afraid of lawsuits resulting in scams based on this 'play money'? As Rheta states in the comments - Couldn't Linden Labs easily claim "banking is a game activity like any other, and that losses are no more prosecutable than losing a fight in Counterstrike?"

Law & Order in the Metaverse

Even if the Linden Dollar is just 'Virtual property' instead of real money it doesn't put Linden Labs (or its users) in the clear. In the Netherlands a group of teenagers recently got arrested for 'Virtual Theft'. In the virtual chatbox Habbo Hotel they scammed furniture out of the account of several other players. Habbo Hotel works a bit different in the way that teenagers pay Habbo Hotel in order to get their 'online credits' - credit cost US$5.25 per 25 Habbo Credits. The players (mostly teens) are able to buy furniture of the Habbo Hotel owner, the Sulake Corporation - and only of the Sulake Corporation - to increase their status within the community by 'pimping' their rooms. This furniture can then only be traded, and Habbo Credits can not be changed back into real dollars.

But what the Habbo incident has proven is - at least in the Netherlands - Virtual Property has juridical value. It can be stolen, and the thieves can be held responsible for real life laws. In October 2007 a bank collapsed with estimated assets of over 700.000USD, the Habbo Hotel thief stole furniture worth about 4.000 Euro. Linden Labs new policy is only a confirmation of what can only be the logical conclusion to a fact real life laws have yet to catch up on in meatspace. The Linden Dollar is real money, real property, and stealing it is real theft. Not part of the gaming process.

Linden Labs strategic decision

So to answer the question "Is Linden Labs policing citizens, interfering with things that aren't their concern in the spirit of free economy?" - No they are not. The banning of banking activities was a preventive strike at what could be a major problem for the Virtual World in the near future. Linden Labs has declared their money 'real'. Real money, real scams, real crimes, and by doing so they have paved the way for the continued development of Second Life as a serious Business Platform. It fits perfectly in the line of banning gambling and 'ageplay' because of international law, it's just Linden Labs struck first this time instead of waiting for yet another media outrage.

Disclaimer: This was a guest publication by Rick van der Wal (Digado). My views may not necessarily represent those of Veejay Burns, main author of this blog.