Swedish game developer Mindark has been granted a licence to be a bank.

Mindark, the developer of the hit online game Project Entropia has been issued a banking license by the Swedish Financial Supervisory Authority, Mindark aimes to launch a fully-functioning in-game bank within the next 12 months. According to Mindark more than 800,000 people have registered to play the game and more than 100,000 are regular players. Furthermore the company bboasts more than $420m of player-to-player transactions during 2008.

Unlike most other online mmorgs, which charge a monthly subscription fee, Project Entropia is free. However, players can pay real money to get at in-game items, such as guns and armour, and the micro-payment system pays for Entropia’s running costs.

The licence will make it easier for players to convert real world cash into PEDs and sustain their characters in the game, said Mindark in a statement. At current exchange rates, 10 PED (Project Entropia Dollars) are worth one US dollar.

“We will be in a position to offer real bank services to the inhabitants of our virtual universe,” said Jan Welter Timkrans, boss of Mindark. It plans to offer players interest-bearing accounts, let them deposit their salaries and pay bills or lend cash via the in-game bank.

The licence also means that each account is backed by deposit insurance to the value of $60,000 according to swedish law.

Regulators will get oversight of financial transactions carried out in the game world, so they can spot if criminals are using it to launder money.