Does this guidance also apply to video game virtual currencies as well? My initial assumption was that "convertible" means it only applies to currencies that can be exchanged back and forth with fiat currency, but I don't explicitly see that stated.
I doubt the authors were smart enough to think of this, and I don't think most people here have really thought of this yet. The online gaming industry is going to be very interested in this once they realize the potential impacts.
In the case of Diablo III, you can sell your in-game virtual gold for real money in their Real Money Auction House, via PayPal. Other games have less official means of exchanging between currencies, but that's at least one official/built-in version that I can think of.
They're covered in the "centralized virtual currencies" section. Since Diablo gold only exists on Blizzard's servers, it is a centralized virtual currency.
Blizzard and gold selling sites are considered MSBs, but not users.
Insofar as such currencies can be converted back and forth to "real" currency, yes, they're covered. I think that's what the document is trying to get at when it discusses "centralized" virtual currencies.
