China’s GAPP Proposes Rules Restricting In-Game Token Activities

GAPP, which stands for the General Administration of Press and Publication of China, has the intention of limiting the range of activities that are associated with in-game tokens. The General Association of Players (GAPP) released a draft of its recommendations for the online gaming sector on December 22.

GAPP’s proposal recommends prohibiting the purchase of tangible products and the exchange of game tokens for legal cash. The rules consist of 62 articles and encompass a wide range of topics associated with regulating online activities.

It suggests some more stringent requirements, such as the requirement that businesses obtain a license in China, that they preserve the data of their customers for a period of up to two years, that they guarantee that their material is in accordance with a list of national and socialist ideals, and that they eliminate any chance for users to register by remaining anonymous.

Tokens are subject to the regulations outlined in Article 23. In order to prohibit the use of game tokens for purchasing tangible items, users will be able to exchange the tokens for “products and services of other units” or “legal tender.”

However, considering that cryptocurrencies do not meet the requirements to be considered legal cash in China and that the rules do not specifically contain the term “crypto,” there is room for speculation regarding the second aspect.

On the other hand, it seems like the GAPP is attempting to protect the economies of online games from a more direct interaction with the economies of the real world. In addition, the standards prohibit game providers from providing induced benefits, such as prizes for registering or logging in more frequently than once per day.

In addition, service providers are required to establish recharge restrictions for consumers and include pop-up window warning reminders for “irrational consumption behavior by users.” However, these rules do not yet have any legal authority.

On January 22, 2024, the deadline for consultation will have passed. According to the data provided by DappRadar, over the course of the past three months, approximately one million distinct active wallets participated in Web3 games on a daily basis.

A conversation that took place on December 17 revealed that Yat Siu, the co-founder of the gaming and venture capital business Animoca Brands, believes that this figure could increase by as much as $100 million in the next year.