JPMorgan Chase Is the First Bank to Enter the Metaverse, and It Is Considering Business Opportunities

JPMorgan, the nation's largest bank, announced that it has created a lounge in Decentraland, a virtual world based on blockchain technology, making it the first lender to enter the metaverse.

JPMorgan also released a paper analyzing how businesses might identify possibilities in the metaverse, in addition to the launch of the Onyx lounge (the name refers to the bank's suite of permissioned Ethereum-based services).

In an email, Christine Moy, JPMorgan's head of crypto and the metaverse, stated, "There is a lot of client interest to understand more about the metaverse." "In order to leverage the full potential of our lives in the metaverse, we put together our white paper to help clients cut through the noise and highlight what the current reality is, as well as what needs to be constructed next in technology, commercial infrastructure, privacy/identity, and workforce."

With the general acceptance of non-fungible tokens (NFT), the metaverse, a catch-all for immersive gaming, world-building, and entertainment, has exploded in the last year, fuelled by integrated commercial applications. Samsung launched a Decentraland counterpart of its New York shop in January, and Barbados established a metaverse embassy, also in Decentraland, in November.

JPMorgan starts its analysis of "metanomics" by noting that the average price of a virtual plot of land doubled in the second half of 2021, rising from $6,000 in June to $12,000 in December across the four major Web 3 metaverse sites: Decentraland, The Sandbox, Somnium Space, and Cryptovoxels.

"In time, the virtual real estate market could start to see services similar to those available in the physical world," according to the JPMorgan analysis. Decentralized finance (DeFi) collateral management, rather than traditional finance businesses, might be handled by decentralised autonomous groups, according to the report (DAO).

According to the article, work in the metaverse would be profitable, citing a variety of entertainment providers as well as apps like RTFKT, a virtual shoe designer recently acquired by Nike. Another significant investment will most certainly be in advertising, according to the bank, which estimates that in-game ad spending would reach $18.41 billion by 2027.

The JPMorgan report aimed to contrast the hype surrounding the metaverse with reality, arguing that many areas require improvement. The overall user experience and avatar performance, as well as commercial infrastructure, are among them.

According to the bank analysis, "we believe the present virtual gaming landscape (each virtual world with its own population, GDP, in-game money, and digital assets) contains characteristics that resemble the existing global economy." "This is where, in addition to our at-scale consumer presence, our long-standing core expertise in cross-border payments, foreign exchange, financial asset creation, trading, and safekeeping can play a crucial role in the metaverse."

JPMorgan also produced a white paper on the metaverse's prospects for brands and customers, which included the following points:

The study attempted to show how to better manage the hype versus reality by focusing on certain topics.

These include the overall user experience, avatar performance, and commercial infrastructure.

In addition, in order to leverage the full potential of our lives in the metaverse, the study examines what needs to be constructed next in technology, commercial infrastructure, privacy, and workforce.

According to the paper, the current virtual gaming landscape contains components that are present in the global economy.

In such a situation, global banks' cross-border payment, foreign currency, financial asset creation, trading, and safekeeping capabilities, as well as their vast consumer footprint, can play a critical role in the metaverse.

The metaverse is a unifying force that combines many aspects of the modern digital age together in one holistic experience.

With an anticipated annual income of over $1 trillion, the metaverse will have an impact on every sector and market in the future.

From a sociological standpoint, the growth of metaverse will assist people in forming communities based on shared ideals and expressing themselves in unique ways.