Virtual currency — "money" earned online or purchased with legal tender for use in online environments — is gaining popularity. And banking giant HSBC is looking for a way to bring it into the banking environment.

"We have a planning assumption that virtual currencies will become mainstream in three to five years," Andrew Davis, global head of e-channels and strategy at HSBC said in an article by Australia's Financial Review. "How people place value on things won't just be with hard currency in the future and we're already seeing micro-currencies emerge around the world."

Davis spoke at the PushStart FinTech Forum in Sydney, in which large corporate banks rub elbows with technology start-ups. He said one example of online currencies crossing over into the off line world was an Amex program that allows cardholders to swap card points for virtual currency.

The Financial Review reported that Australia's RBA is including virtual currency as a topic in its forthcoming study of innovations in money and banking. PayPal, Microsoft and Commonwealth bank all submitted commentaries about the challenges and opportunities of virtual currency for the study, which is due out in mid-June.

Commonwealth Bank also discussed in a blog post the likely impact of virtual cash on the real cash environment, the article said. According to the blogger, "The virtual cash revolution has fostered a means of exchange that is independent of both the banks and the state. But just like video didn't kill radio, virtual currencies and online trading won't herald the end of real-world currency and trading."

For more on this topic, visit the bank/credit union research center.