Banking crisis

Reuters have a dedicated Second Life news centre, which is a pretty good way of keeping up with how SL is impacting on the real world. The big story this week is Linden Labs’ ban on unlicensed banking, which came into effect yesterday.

I can’t understand how anyone failed to see the ban coming, especially after LLabs outlawed gambling, since the motivation was exactly the same – LLabs’ desire to avoid falling foul of US law by providing a platform for wire fraud.

I am also struggling to comprehend how anyone could have thought that depositing money in an SL bank was anything other than folly, since a glance at the SL economic statistics reveals that the economy is nowhere near developed enough to support the creation of institutions of finance capital, which means that any “bank” purporting to offer interest on capital was odds-on to be some sort of Ponzi scheme.

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