JP Morgan has become the first bank to open office in the Metaverse.
With this entry, the banking giant has sped up race to harness the opportunities therein in the virtual space.
The bank launched a presence in the popular Metaverses, Decentraland with its Onyx Lounge.
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Onyx Lounge cites in Metaiuku, a virtual version of Tokyo’s Harajuku shopping district.
When you get to the district, you will see the lounge with a clear sign, “Onyx by J.P Morgan.”
Around the Onyx Lounge, a tiger roams the first floor while being overlooked by a portrait of the bank’s boss, Jamie Dimon.
Also, on the second floor, a person’s avatar can watch experts talk about the crypto market.
Why Its important for banks to open offices in the Metaverse:
This first virtual Metaverse bank opened the way for other banks to equally launch their own presence in the space.
One of the reasons why this is important is because the virtual space promises a market opportunity of US$1trn.
This is especially in the area of real estate, explains JP Morgan.
Keep in mind that the metaverse is a virtual world where friends family, and everyone can live and do things like they do in real world, using avatars of themselves.
What services the Onyx bank will provide:
The bank will provide Ethereum-based services to people.
Also, it will offer institutions and businesses an opportunity to enter the metaverse.
According to JP Morgan, the following opportunities abound in the Metaverse for both banks and everyone to tap.
Also, the bank and other financial institutions, will be able to provide credit services in the Metaverse.
Other services are mortgages and rental agreements.
Meanwhile, from these services, decentralised autonomous organisations will rise as financial institutions to provide these services.
Other services are in-game currency and digital assets tradings.
Transactions worth US$54bn annually:
The bank, in a white paper, said already people make transactions in buying and selling of virtual goods and services amounting to this figure.
Socialisations in the virtual space now worth US$650m:
The bank also noted that currently, the world socialises in the virtual space and this amounts to approximately US$60bn.
It said messages worth that amount are sent daily on Roblox.
Virtual Creators’ Earnings promise to exceed over US$80m:
In 2021, the US GDP for Second Life was around US$650m.
Meanwhile, the bank believes that creators of digital products and services earned nearly US$80m.
NFT boom promises huge revenues to exceed $41bn:
The banking giant also believes that with the integration of NFTs into the Metaverse, the sector promises huge financial opportunities.
It said NFTs currently have a market cap of US$41bn.
Experience:
Metaverse mates, as Meta’s CEO Mark Zuckerberg describes it, as well as entities will have opportunities to partner each other for financial and other returns.
The bank said so far, Experience in the Metaverse space promises 200 strategic partnerships to date with The Sandbox.
It said the partnerships includes Warner Music Group which plans to launch a music-themed virtual world.
Why Join Metaverse?
While JP Morgan said it is poised to explore “the many exciting opportunities it [Metaverse] presents for customers and brands alike.”
The bank revealed that it invested in the Metaverse so that it won’t be left behind in the growth trajectory of the Metaverse.
It said the risk of “being left behind is worth the incremental investment needed to get started.”
JP Morgan Eyes Virtual Real Estate:
Virtual real estate ownership is one area JP Morgan is eyeing.
The bank said its interest in this area stems from the fact that in just six months in 2021, the average price of a parcel of virtual land doubled.
Virtual lands sold for US$6,000 in June of 2021 and later jumped to sell for above US$12,000.
The bank forecasts a virtual real estate market that could eventually start seeing services much like in the physical world.
Implications:
With this entry of banks in the Metaverse, people can now enjoy banking services like in the real world.
Also, this will further create opportunities for people to tap into the virtual financial world.
Meanwhile, JP Morgan believes this presents an opportunity for the bank to play a major role – given its long-standing core competencies in cross-border payments, foreign exchange, financial assets creation, and trading and safekeeping.
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