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Denmark’s Saxo Bank plans to offer Second Life residents the ability to manage their real-life financial portfolios from within the virtual world, and may eventually create a market to trade the Linden dollar against real-world currencies.
Denmark’s Saxo Bank plans to offer Second Life residents the ability to manage their real-life financial portfolios from within the virtual world, and may eventually create a market to trade the Linden dollar against real-world currencies. Saxo hopes to add a new platform for Second Life residents called VirtualTrader to its existing platforms by the third quarter of the year, said Stephan Martinussen (Stephan Canto in Second Life), the bank’s co-head of sales trading. VirtualTrader will be customizable within Second Life and will include an option for clients to receive a portion of their trading profits in Lindens. “We’re launching phase one of what we want to be, which is an entertainment component,” he said in a phone interview (a series of games and concerts are planned at the company’s island). “Phase two is the Saxo VirtualTrader … if you have an account with us, you can log in through your avatar.” “Phase three could be enabling Second Life residents but also non-Second Life residents to speculate in high-frequency trading of the Linden dollar against other currencies,” Martinussen said. The virtual forex market is currently dominated by Linden Lab’s Lindex exchange. On Wednesday, L$62,005,226 (US$223,845.58) changed hands on the Lindex; by contrast, the real-world’s currency markets trade more than US$2 trillion daily. Residents selling Linden dollars pay fees of 3.5 percent, much higher than currency traders in the real world. Currency traders are also not allowed to buy and sell more than US$40,000 in a 24 hour period, or US$1,280,000 in a 30-day period. Linden Lab keeps the Linden dollar exchange rate within a relatively narrow band against the U.S. dollar through a combination of monetary policy — buying and selling Lindens and U.S. dollars on the open market — and fiscal policy, by adjusting the sinks and sources of the Second Life economy. Martinussen said the currency is not yet sufficiently mature for the bank to start trading it against real-world currencies, due in large part to Linden Lab’s role. “It’s not just volume and liquidity: it’s a question of who controls the currency … at the end of the day (Linden Lab) does control it,” he said. “As a company resident of Second Life, we want to add what we can to the maturing of the economy and the currency.”
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