There's an interesting article in today's WSJ about the growth of a virtual currency in China - the QQ coin. The official Chinese currency, the yuan, is strictly regulated and you cannot take it out of the country. This makes it impossible for ordinary Chinese citizens to move their money. My wife has two homes in China but cannot really do much with them. If she sells them she cannot get the money here legally.
It's interesting how technology has allowed people to circumvent government regulation, giving them more freedom. Virtual money creation in Second Life seems to be a similar phenomenon.
My guess is that the Chinese government will try to crack down on this, but who knows. Maybe it will lead to the yuan floating more easily and people being allowed to move their money out of China. China is teetering on the edge of real market reforms. The people there are experiencing much more freedom than Russian people did during their "reform" period. Putin has put the clamps down on that and Russia has lapsed back into Soviet times again. I'm hopeful that China keeps going forward.