From: Djamila Marikh
The US dollar is a government backed commodity, the "linden' is an electronic ghost. A Fed fine for missing end of day balance, where a bank confirms concrete dollars and government registers it, could destroy Brazil.....a linden outage makes people gripe on the forums.
SL is not covered by banking laws because it doesn't lend money.
The US dollar is backed by the US government, and outside the US government's asssurances and our assessment of its economic stability, the US dollar is worthless.
The same is true for the Linden, only being backed up by LL. Decidedly a less substantial backing, but otherwise the same, from an economic perspective.
The US Treasury is trying to figure out whether (and how) to value ingame assets for tax purposes. What could be more real than that? I hope that the usual beaurocratic ineffectiveness prevents them from coming up with anything tangible in the forseeable future, but eventually I bet they do. I think the odds are nearly even that they will within 10 years from now. BTW, that's how I first heard of SL, reading an article to that effect in the WSJ.
LL tries to keep the Linden legally valueless yet valuable in the market (the RL market). It's an interesting fence to walk, but one that casinos have done for years (albeit differently, since chips are denominated in real currency values, whereas the Linden value is market driven but indirectly controlled by LL's ability to affect massive currency sources and sinks).
The linden is a fungible, valuable asset. A failure of the Linden would be catastrophic for some RL businesses, admittedly small businesses from an RL perspective.
SL is not a bank because it does not loan funds. It's not covered by banking laws, any more than is a foreign country with its own currency. SL is almost like a banana republic, but one that manages its currency pretty well, and with few border disputes. But of course, it has no embassy. That would be laughed at today, but I bet that this changes by the end of this century. (I predict that virtual worlds will become much more than the pastime that SL mostly is; since they're significant venues for personal interaction and will only become more realistic as the technology improves.)
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