I understand that this is about laws regarding money laundering and funding terrorism and all that "Evil Stuff Which We Need To Stop At Any Cost" nonsense. However, this position, of automatically disallowing the conversion of virtual money to "real" money, effectively makes impossible a viable online economy, and that's simply because people would not be allowed to extract money which they earned through work which benefited an online community.

Hypothetically, I create yet another clone of Flickr. My clone's claim to fame is that searching, based on user-generated tags, is exceptionally accurate. This accuracy is due to users being unusually motivated to provide numerous and correct tags for their own pictures, as well as for those of other users. The reason for this motivation is that they are being paid, per tag, in my virtual currency. Also, they are careful with details because inaccuracy costs them money. The whole thing is kind of like HN's karma, but with real value added.

They can then use that money to purchase more bandwidth for their own pictures, to trade with other users for favors, or for whatever other reason which makes sense within the economy of my Flickr clone. So, someone without a credit card can earn, through real and useful work, the same kind of benefits that those who do have credit cards, but who do not put in any work for the benefit of the community. Now, what if some people wanted to put in so much effort that they would start to earn significant money? Due to these laws, those people are stuck, because they can never withdraw that virtual money, in the form of "real" money.

I could have two forms of virtual currency, one which came from credit cards, and one which was wholly generated by my system, but then lazy people, with credit cards, wouldn't be able to pay those without credit cards, to generate tags for them. Other thoughts I've had only serve to add even more complexity. I would like to hear ideas on how to solve this problem without violating laws or the credit card processor's TOS because, to me, it's obvious that the next level of social websites must have the ability to give users more power than simply generating content, and that this power should be in the form of a real economy.