Deadline Passes for SL Banks; No Word on Current Situation

Tuesday was the deadline for Second Life banks to stop offering interest or close down — and it seems to have passed without any more notice from the general Resident population. Well, at least other than the constant hits I get on my previous articles. One or the other of the articles gets at least a few hits a day. As for the feared runs on assets, those were quickly stifled by the bank owners themselves, who slapped limits on their ATMs until they could supposedly liquidate assets and cover withdrawals.

What has happened, from the looks, is the essential collapse of the Grid-bank industry. Several banks have either sold their assets to purchasers, or have simply closed up shop. At least a few are trying to work around the ban on interest payments with what amounts to a renaming of “interest” — or they plan to move to new metaverses such as Central Grid. The ones hanging on still promise that all deposits will be covered for those willing to offer them the time to gather or convert their capital. Whether this will work out in the long run, knows God.

One thing is probably certain: someone else will devise a plan to offer a return on investment to Residents, and there will be a rush to join the industry — until RL lawyers get nervous, justifiably, about liability issues. And that will be the end of that. I would rather have a no-bank world, though, then take a chance on leaving my lindens with a scammer. That cash has value both in- and out-world, and I want control of it for myself.

Posted January 25, 2008 by Harper Ganesvoort in Business

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