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I don't think alternative currencies have a long-term future. The only reason they exist now is because people and governments in most countries are quite ignorant about technology. Once they become more widely used, they will start causing a whole lot of problems* and will be banned by governments.

The real solutions, in my opinion, have to use real currencies or they will face a severe risk of death by regulation.

* Use for illegal activities.

* Problems with controlling capital flow across national borders.

* Problems with estimating money supply in an economic system etc.

There is a precedent for doing it legally, Paypal, Facebook Credits, etc are all digital currencies. They do it by getting licensed as a money transmitter and complying with all AML and know your customer laws. It's an expensive and long process but people are able to do it. Not sure I fully understand the last two bullets. In general I think you're right that this startup will have larger legal challenges/costs than most but building something that is 100% above board and shows you're making a good faith effort to comply/do the right thing buys you a lot of good will. You want to be YouTube, not MegaUpload.

Paypal is more of a wallet service that works with real currency. Even then it's quite heavily regulated in India, where I live. I'm not sure about other developing nations. FB credits have extremely limited use as far as I know, so it's not much of a threat. Another non state-issued currency is food coupons (like sodexo). As long as the new currency cannot be universally used, it's of no concern to the authorities.

You cannot, for example, pay some shady person for a handgun with FB credits or food coupons. From what I can tell, your currency will make that possible. If this transaction happens with a regular bank account (through creditcard or bank transfer), the bank will be able to point the police to the person involved. Will you also be able to do this? The price for reliably collecting, holding, updating such information is quite high.

I'm pretty sure that storing an audit of your transactions is a legal requirement for any financial services company. It's a compliance no-brainer.

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