Responding to the RBA's call for submissions relating to innovation in payments systems, Microsoft points out that virtual currencies have some key advantages driving their adoption including the removal of the cost of multiple card processing interchange fees for low value or micro-transactions.

Says Microsoft: "While these systems are generally closed at this point of time, it is foreseeable that consumers may desire in the future to exchange value between the various schemes and that they could well become more widespread and prevalent within online retail environments."

Growing consumer adoption of virtual currencies has led to a mixed response from regulators. Chinese authorities, for instance, have moved to ban the use of virtual currency in the trade of real goods and services in a bid to limit its possible impact on the financial system.

Meanwhile, the French law courts are being asked to define the status of the virtual currency Bitcoin, after local banks switched off accounts for exchanges handling the currency on the presumption that Bitcoin should conform to electronic money regulations.

At the moment, Microsoft Points are not convertible to a monetary equivalent, but are used solely to gain licenses to digital products. However, implicit in its submission to the RBA, Redwood is clearly looking to a future in which the store of value inherent in Points can be used for transactions beyond the XBox Live and MSN community.

The RBA submission concludes: "Looking into such a future from the perspective of today's systems raises the question as to whether the domestic payments infrastructure could be modified or adjusted in some way to facilitate and manage the exchange of value beyond traditional currencies."