Cryptocurrencies are digital assets. This has something in common with gaming currencies of various kinds. These allow players to purchase certain digital products within the respective games. Now it is being considered to combine these two concepts. Namely, an in-game currency could be tokenized so that a new value is added outside the game.

However, certain guidelines should be taken into consideration. On this topic, the two crypto-law specialists, André Schenk (left) and Finn Niklas Nitz (right) from the renowned law firm SBS LEGAL in Hamburg, have published an informative legal analysis.

In-game currencies are bought with real money

While computer games have long served a niche, the gaming industry has grown exponentially in recent years. This has also created new ways to make games of all kinds profitable. Special attention has been paid to in-game currencies, which game developers can develop individually for a game.

The value of such digital currencies depends on the popularity and individuality of the game. Regularly, these currencies can be purchased with real money in order to then buy digital assets within the game. So these in-game currencies have a real market value.

V-Bucks as a digital currency

One example would be the extremely popular game Fortnite from the game developer Epic Games. The game contains so-called V-Bucks as in-game currency, from which one can buy digital clothing, for example.

Epic Games sets the prices itself. Currently, a player receives, for example, 1,000 V-Bucks for 8.99 euros, 2,800 V-Bucks for 22.99 euros and 13,500 V-Bucks for 89.99 euros. So it is possible to quickly spend large sums of real money here.

Gaming and NFTs

There have already been numerous projects in collaboration with game developers in the NFT area. Non-Fungible Tokens (NFTs) are digital assets that are non-fungible, i.e. not interchangeable. This essentially means that they cannot be exchanged one to one for another asset because they are unique.

The game developer Ubisoft, for example, started a major NFT project. For the computer game „Ghost Recon Breakpoint“ own NFTS were generated. The game is a realistic military simulation, so players could buy assets such as a hand gun with individual engraving as an NFT. Whoever bought such a weapon could then use it in the game – the uniqueness was an additional incentive.

Necessity of a BaFin license

Anyone who plans to provide certain banking and financial services in Germany needs a license from the Federal Financial Supervisory Authority (BaFin). Different authorization obligations apply. Which one exists depends on the planned business model or the legal and actual design of the planned products and services.

This also has to be taken into account when creating a crypto token from an in-game currency. A game developer, for example, could be classified as a financial services institution. According to § 1 para. 1a no. 1 German Banking Act (KWG), this includes the mediation of transactions for the acquisition and disposal of financial instruments (investment advice). Cryptocurrencies are also explicitly mentioned as financial instruments here.

Are gaming crypto tokens financial instruments?

It is therefore questionable when tokenized in-game currencies are considered cryptocurrencies – this is not automatically the case. For qualification as a cryptocurrency, an in-game token must either be used as a means of exchange or payment or serve investment purposes.

Investment purposes do not exist just because in-game tokens are bought in the expectation of an increase in value. But they must be offered by the provider or third parties associated with him to be suitable for investment purposes.

Game developers must therefore pay particular attention to this when promoting the corresponding projects to players. The classification therefore depends heavily on what is to happen with the tokenized in-game currency. If it meets the definition of a cryptocurrency according to the KWG, for example, a