The global gaming industry is moving forward faster than anyone realized possible. So much so that IMVU’s gaming tokens are gaining recognition from Government agencies.
It works in the favor of the crypto space though.
The US Securities and Exchange Commission (SEC) recently granted a no-action relief letter to IMVU the popular gaming Metaverse.
E-Crypto News caught up with Daren Tsui, IMVU’s CEO to talk about this. Here is what he had to say.
- Congratulations on the receipt of a No-Action letter from the US SEC? Based on the letter, what can you do and can’t you do as per the terms of the letter?
The detailed answer for this would have to go beyond this interview, but the short answer is: in the No-Action Letter (NAL), there is a focus on ‘intended use’ and setting up an ecosystem that promotes intended use with IMVU and other virtual world/gaming users.
The main victory in the SEC NAL is that it allows two significant things for IMVU. First, it allows us to launch our new VCOIN digital currency in the United States and globally.
This is really important as IMVU is a global platform and VCOIN has the potential to make P2P transactions frictionless for our global user base. Second, it allows IMVU users to exit the platform with VCOIN and convert that VCOIN to fiat.
This is the first time a US entity has been granted that ability and it will allow us to provide real value to all of our users.
That said, we have controls around how much VCOIN a user can purchase, how much they can convert into cash a month, etc.
These controls will not limit the use from our users, but they do signal to others that VCOIN is not a security and not an asset one should purchase an investment – because it is not one.
2. Do you think that gaming systems will provide the fastest use-cases for cryptocurrency adoption?
I think the FinTech/Defi space has proven the first use cases for blockchain technology and crypto-assets. With IMVU’s NAL, the gaming/social space will be the next space to really take advantage of this new technology.
Users in virtual worlds, gaming and social platforms are used to spending cash to purchase “credits” (or other digital currencies).
The move to crypto-assets that have real value that can be spent on and off the platform will be natural for users and will drive more transactions and activity than the FinTech/Defi space.
3. How will VCOIN be used offline?
Yes. As everyone in the Metaverse and gaming space knows, users are part of many different worlds and titles.
The ability to take VCOIN off the platform will do a number of things. 1) It will allow users to pay others that are connected to our world but not avid players.
These users might be coders, editors or others that provide services for use on the platform but don’t want Credits for their services.
Now they can easily be compensated in VCOIN, even if they are not a registered user. 2) VCOIN is an ERC-20 token so users can pay each other and transfer VCOIN to each other.
This is only possible in the US because of the NAL. What then makes VCOIN trusted, is that IMVU will buy back VCOIN and convert it into fiat for users around the world.
4. What are your thoughts on Cryptocurrency regulation?
First, I am a huge fan of what the SEC did with IMVU and the extension it is giving the broader space.
But, of course, as a businessman that looks at new products and user growth on a daily basis, I, like many, wish we could go faster.
We all want to protect the users of crypto currencies, but many companies have to make hard choices on launching globally with longer processes or only outside the US to speed up time to market.
Hopefully at some point that doesn’t have to be a tradeoff as the rest of the world is already ahead of the US in blockchain and crypto-base regulations.
5. Do you think that the Cryptocurrency-fiat exchange scenario will go mainstream? Please tell us the reasons for your answer.
“We believe it will. The ability to have an easy way to convert crypto assets (in this case VCOIN) into the fiat of your home country is a very valuable use case.
IMVU has seen within its own economy that if users trust and know that they can convert into fiat, then they are more likely to hold and spend their crypto assets on the platform instead of turning it into fiat the moment it is earned.
As the service economy on IMVU matures and users and earners gain more and more experiences to spend VCOIN on, the less VCOIN will be automatically converted into fiat.”
6. How will the peer-to-peer economy change the way people interact?
Creating friendships and having social experiences on the platform won’t change at a core level.
What will change is there will be a way (for the first time) for every user on and off the platform to purchase, hold, spend real value.
It’s like an economy where bartering has been the norm, but now has a digital currency. We think the creativity of our users will be unleashed and new economies/offerings will emerge.
7. Now that the US SEC has given terms for VCOIN transactions, do you think this will become the norm for similar scenarios? Please tell us the reasons for your answer.
I do think IMVU’s NAL creates a new regulatory framework that a lot of new and existing businesses can take advantage of.
It’s a powerful NAL that (for the first time) allowed crypto assets to leave an ecosystem and be freely traded.
8.How can gaming Metaverses change the world?
There are so many ways beyond what time we have to discuss, but the shorter answer is: I think it can connect us all in avatar form (our virtual selves), in environments where we can play, socialize, build, earn and live our best virtual lives.
Unlike today’s social offerings that are scrolling feeds of mindless posts, spending time with others in the metaverse is an experience as close to real life as one can get; and for the first time, we’re bringing a way for everyone to earn in these environments.
9. Will Digital Avatars and social gaming become an important part of tomorrow’s economy? Please tell us your best and worst-case scenarios?
“Yes! Users around the world are already spending more time in these virtual environments than on any other platform(s).
And in many cases, gaming is outpacing the entertainment industry. The introduction of true commerce and virtual economies is obvious for both the users and for the earners on these platforms.”
10. Do you have any future plans for IMVU? Do you care to spill the beans?
We will continue to invest in ‘spreading the power of friendship’ through new offerings for our users around the world.
And we’ll continue to focus on developing a next-generation virtual economy – underpinned by a new digital currency – VCOIN.