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A Chinese lawmaker has called for more efforts to tighten the supervision over "virtual currencies" issued by Internet firms, saying they are boosting money laundering and online gambling.

 

Internet companies have launched around ten virtual currencies to cash in on the huge business as China's Internet population surged to 137 million at the end of 2006.

 

Zhou Hongyu, a deputy to the National People's Congress said the virtual currencies are originally used in buying online equipment and services, and can be bought with real money.

 

Zhou, also vice director of the provincial education department in central Hubei Province, said that problems arise when Internet users pay virtual money to buy commodities and services provided by other Web sites.

 

"The lack of supervision over virtual money transaction can lead to money laundering, tax evasion, and illegal fund-raising," he said.

 

He noted that it will give a rise to online gambling as the illegal earnings from them can be converted to real money.

 

"Virtual bank accounts can easily lost as they are not subject to active and effective protection from Internet operators and government authorities," Zhou added.

 

Some experts worry that conversion between virtual money and Renminbi, if unchecked, can threaten the latter and lead to dire economic consequences.

 

Li Chao, a spokesman for the People's Bank of China, said in January that the central bank had begun to study the issue and would firmly crack down on them if they were used for money laundering.

 

(Xinhua News Agency March 15, 2007)