China cracks down on game coin trading, mandates CBDC wallets

On Friday, December 22, Chinese regulators introduced new draft rules for online video games, zeroing in on players’ spending amid a broader crackdown on the sector.

Among the unveiled rules were those that require that game coin trading services must use real-name central bank digital currency (CBDC) wallets.

China sets spending limits and bans daily login rewards

According to the draft, game coin trading service providers will be required to use the true names of their digital renminbi (RMB) wallets and must not offer anonymous services. Furthermore, the regulators banned services that allow players to exchange game coins for fiat.

The draft, published by the National Press and Publication Administration (NPPA), also said online games will have to impose spending limits and get rid of daily login rewards. Additionally, the rules proposed prohibiting significant tips for rewards to players who livestream their games, and also banning online games from providing probability-based luck draw features to minors.

The game approvals must be processed by regulators within 60 days, the draft said, adding that game publishers are obliged to store their servers within China.

The administration is seeking public opinion on the proposed regulations through January 22, 2024.

Stocks of Chinese tech giants nosedive

Following the draft’s release, shares of numerous Chinese internet giants plunged on Friday, erasing billions off their collective valuations.

Among the biggest losers was the multimedia juggernaut Tencent, which fell 12.35% in Hong Kong trading, wiping 367 billion Hong Kong dollars ($47 billion) off its market cap.

Gaming giant NetEase saw its share price plunge 25%, its sharpest single-day loss since June 2020, while video-sharing platform Bilibili tumbled 9.7%. Short-video app operator Kuaishou dropped 7.2%.

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