In today’s digital economy, terms like “coins,” “beans,” “points,” and “diamonds” flood online platforms — from gaming and e-commerce to live streaming and blockchain networks. While these virtual assets share a common trait — they all function as digital tokens with exchange or settlement capabilities — their underlying economic purposes, legal classifications, and regulatory implications can vary dramatically.
This article breaks down the major types of virtual property into four clear categories: prepaid consumption, reward-based usage, investment/financing, and currency-like digital assets. By understanding their differences, users and businesses alike can better navigate compliance, usage rights, and long-term value.
Prepaid Consumption Virtual Assets
One of the earliest and most widespread forms of virtual property in China is the online game virtual currency, such as Tencent’s Q币 (Q Coin). These are digital tokens issued by service providers that users purchase with real money for future use within a specific ecosystem.
👉 Discover how prepaid digital assets are shaping modern online economies.
A typical prepaid virtual asset is defined as:
- Purchased with legal tender at a fixed rate (e.g., 1 RMB = 1 Q Coin),
- Stored electronically on the issuer's server,
- Usable only for designated services or products offered by the issuer,
- Non-refundable into cash under normal circumstances,
- Sometimes transferable between users.
Under Chinese regulations, including the Notice on Strengthening the Management of Online Game Virtual Currency and the Interim Measures for the Administration of Online Games, companies issuing such currencies must hold a valid Network Culture Operation License. They are also restricted from allowing redemption into fiat currency or use across third-party platforms — rules designed to prevent financial risks and speculative behavior.
For example, Q Coins are explicitly labeled by Tencent as “statistical codes” for accessing value-added services, not as monetary substitutes. Similarly, live-streaming platforms like Douyu issue “Fish Fins” — another form of prepaid credit used exclusively within the platform to send virtual gifts to streamers.
From a legal perspective, these assets represent a prepaid service contract between user and provider. The user pays in advance for future access to digital goods or experiences. This model closely resembles single-purpose prepaid cards used in retail, except transactions are tracked through digital units rather than traditional balances.
When users trade these tokens among themselves, they're effectively transferring contractual rights — a practice permitted only when allowed by platform rules and within tightly controlled environments.
Reward-Based Virtual Assets
Unlike prepaid assets, reward-based virtual assets require no upfront payment. Instead, they are granted to users as incentives for engagement — such as shopping, reviewing products, logging in daily, or referring friends.
Common examples include:
- JD.com’s Jing Beans (京豆): Earned through purchases and activities, redeemable at a 100:1 ratio against cash for orders on JD.
- Airline mileage programs: Accumulated via flights or credit card spending, exchangeable for tickets or upgrades.
- Loyalty points: Offered by supermarkets, telecom providers, or banks.
These systems aim to boost customer retention and repeat business. While they resemble prepaid credits in function, their origin lies in marketing incentives, not prepayment.
Some platforms have expanded this model through universal reward exchanges:
- JD’s Gang Beng (钢镚) allows conversion of various brand points into a unified currency.
- Ping An’s Wanli Tong (万里通) aggregates points from multiple partners into one redeemable balance.
Such platforms publish exchange rates between different point systems, enabling cross-brand redemption — though direct cash-out remains extremely rare.
However, there are legal risks. In one notable case, a tire manufacturer was penalized for offering积分 (points) to retailers who increased sales volume. Regulators ruled this constituted commercial bribery, as it improperly influenced purchasing decisions and distorted market competition.
Thus, while reward points appear harmless, businesses must design programs carefully to avoid violating anti-bribery or unfair competition laws.
👉 Learn how reward systems influence consumer behavior in digital marketplaces.
Investment-Focused Virtual Tokens
With the rise of blockchain technology, a new category has emerged: tokens issued for fundraising purposes, often referred to as Initial Coin Offerings (ICOs).
These tokens are typically marketed with promises of future utility — such as access to a decentralized platform or service — but many function more like investment instruments. Buyers don’t necessarily intend to use the token; instead, they hope its value will rise due to the project’s success.
The U.S. Securities and Exchange Commission (SEC) applies the Howey Test to determine whether a token qualifies as a security:
- Is there an investment of money?
- In a common enterprise?
- With an expectation of profit derived from the efforts of others?
If all three apply — which they often do in ICOs — the token is considered a security, subject to full disclosure and registration requirements.
In China, regulators took an even stricter stance. The 2017 joint announcement by seven government agencies declared ICOs illegal public financing activities, citing risks of fraud, pyramid schemes, and unlicensed securities issuance. As a result, any token primarily designed for investment or fundraising is effectively banned in mainland China.
That said, regulatory clarity could evolve. Future frameworks may allow compliant token offerings under strict supervision — especially if the asset demonstrates genuine utility beyond speculation.
Currency-Like Digital Assets
At the far end of the spectrum are decentralized cryptocurrencies such as Bitcoin and Ethereum. Unlike other virtual assets:
- They lack a central issuer,
- Their value stems from market supply and demand,
- They operate independently of any single company or platform,
- They can be used anonymously in peer-to-peer transactions.
Japan’s Payment Services Act offers a clear definition: virtual currencies are electronically stored value units that can be used by unspecified parties to purchase goods or services, transferred via digital systems, and not denominated in fiat money.
While some countries regulate them as financial assets or payment instruments, China prohibits cryptocurrency trading and mining, citing concerns over capital flight, money laundering, and financial stability. Crypto exchanges and related services are banned domestically.
Still, global interest persists. Institutional adoption, blockchain innovation, and decentralized finance (DeFi) continue to push the boundaries of what digital money can do.
Frequently Asked Questions (FAQ)
Q: Are Q Coins considered legal tender in China?
A: No. Q Coins are not legal currency. They are internal tokens for Tencent’s ecosystem and cannot be used outside its services or converted back into RMB.
Q: Can I sell my Jing Beans for cash?
A: Not officially. JD.com does not allow direct cash redemption of京豆. Attempting to sell them on third-party sites violates platform rules and may result in account penalties.
Q: Is it safe to invest in blockchain-based tokens?
A: In China, most token sales are prohibited. Elsewhere, investors should assess whether the token is regulated as a security and verify project transparency before participating.
Q: What happens to my virtual assets if a platform shuts down?
A: Users may lose access unless the company provides refunds or migration options. Always review platform policies on termination and data rights.
Q: Can loyalty points lead to legal trouble for businesses?
A: Yes. If rewards incentivize preferential treatment or anti-competitive behavior (e.g., forcing retailers to buy more), regulators may classify them as commercial bribery.
Final Thoughts
Despite their flashy names — beans, coins, wings, stars — all virtual assets are ultimately digital representations of economic relationships. Whether you're a consumer earning points or a business issuing tokens, the key is to look beyond labels and examine the real-world function:
- Is it prepaid access? → Regulated like stored value.
- A reward for engagement? → Governed by marketing laws.
- An investment bet? → Likely falls under securities rules.
- A decentralized medium of exchange? → Faces strict financial oversight.
By applying this framework, individuals and organizations can make smarter decisions in an increasingly complex digital landscape.
👉 Explore secure ways to manage digital value in a regulated world.