Mainland authorities have a new boundary dispute to settle, not with another nation, but another world. They hope to draw the line quickly - preferably next year - but the 'landscape' may have changed before the line has even been pencilled in. People's Bank of China director Li Chao this month made it known that virtual money had become a cause for concern and that the PBOC would next year draft a regulation covering virtual transactions, according to news sources. Mr Li's remarks came in response to questions on whether the virtual QQ coins - issued by China's largest instant messaging service provider Tencent - were a threat to the yuan. The question was raised by public prosecutor Yang Tao . With over 224.2 million active users of Tencent's QQ messaging service, Mr Yang was quoted as saying: 'The QQ coin is challenging the renminbi's status as the only legitimate currency in China.' However, Tencent financial spokeswoman Catherine Chan said these fears were exaggerated. She said the virtual coin was introduced when the company launched its internet value-added services in 2002 as tokens for the consumption of online services. 'Anyone with minimum financial knowledge could tell the difference,' she said. Some users say it is more convenient to use QQ coins than the yuan for online purchases. Wang Ya , 25, has used the QQ instant messenger for six years and recently spent some QQ coins she bought with real money to buy her virtual pet a fashionable fur coat. For Ms Wang and many others who spend a lot of time in a virtual world, there is nothing wrong with exchanging real money for the virtual equivalent. According to Tencent, QQ coins can be used to buy only virtual items, such as decorations for a virtual home, virtual pet food and music, and only on Tencent's website. Yi Xianrong , director of the Chinese Academy of Social Sciences' financial development department, sees no threat as the QQ coins are related to a single company, while the yuan is related to the entire nation. 'The two are fundamentally different.' But QQ coins' liquidity is greater than many believe. 'I have seldom bought QQ coins at their official price. I get them from unofficial online vendors,' Ms Wang said. The official price for one QQ coin is 1 yuan, but many online vendors sell them for 0.4 to 0.8 yuan via online shops and bulletin boards. In a statement, Tencent said: 'We do not have a mechanism to transfer unused QQ coins back to renminbi, and we do not support transactions made with QQ coins solicited via dubious operations.' However, the statement implies that QQ fever is getting out of Tencent's control and that the coins are changing hands for cash on the black market. 'I earned 80,000 yuan a month during the best period last year,' said Hu Pei 23, who describes himself as the king of online dealers in Fuzhou , Jiangxi province . 'The trick is getting large numbers of coins at a low price.' Mr Hu says he uses methods such as employing professional gamers to win QQ coins, hacking into other users' accounts to plunder their reserves, fraudulent gambling and buying from insiders at entertainment companies. He then sells QQ coins for yuan over his own online services. He knows at least 40 other people who are in the same business, some of whom sell coins and weapons for online games provided by him. He once sold a dragon-slaying sword used in the Legend of Mir online game to another dealer for 8,000 yuan, 'but he sold it for 20,000 yuan one month later', he said regretfully. Southwestern University of Finance and Economics Law School associate professor Wang Yuanjun said: 'At the moment virtual money can circulate only within the virtual sphere of one company. But all paper currencies can trace their origins to private banks. It's evolution that matters. It's evolution that imposes a threat.' The number of part-time and full-time virtual coin vendors is increasing in line with the ways QQ coins are circulated. Some bulletin board moderators are paid in QQ coins, while more and more youth-oriented online sites related to music, magazines and anti-virus software accept QQ coins even though they are not connected to Tencent. University of International Business and Economics Information School head Chen Jin explained: 'Because virtual money is easier to use when conducting a transaction in a virtual world, it has gained popularity and spread from one website to another, and from virtual goods to real goods. It's like a snowball - once it gains momentum, you can't stop it.' In a recent article in the Nanfang Daily, prosecutor Yang Tao wrote: 'The government will limit the application of QQ coins. [In the future], they can be used only to buy services provided by Tencent, not any other companies. They can only be used to buy virtual items, not anything real.' But many doubt the new policy will be effective. As Shantou University Business School economist and e-commerce expert Lin Danming said: 'This technology develops so fast. The new law may catch the QQ coins, but God knows what a Z coin would look like.'