A bold move can shape the future of a financial institution, and it looks like that is what JP Morgan just did with its move into the Metaverse. Financial institutions may be wary of cryptocurrencies but with non-fungible tokens, it’s a different game.
On February 15 2022, the largest bank in the US , also known as the long established giant global financial institution announced the opening of a virtual lounge on Decentraland – Ethereum-based virtual reality platform.
The move made JP Morgan the first central bank to jump in the Metaverse.
Welcome To The Metaverse JP Morgan
Dubbed “Onyx Lounge,” the virtual spot is located in the shopping district Metajuku. When visiting the lounge, visitors will find a digital portrait of Jamie Dimon, the JP Morgan CEO, and be accompanied by a virtual tiger.
There is also a representation of blockchain innovations and discussion of e-commerce and fintech by Takis Georgakopoulos, Global Head of JP Morgan Payments. The bank also detailed numerous opportunities linked to the Metaverse.
According to the report, all walks of life will likely feel the impact of the Metaverse model as the space can generate more than $1 trillion in annual revenue.
The Bank Wants Money
Roughly $54 billion is spent annually on virtual goods. The bank highlighted the price increase of virtual land in Decentraland, The Sandbox, Somnium Space, and Cryptovoxels. Between June and December of last year, a parcel’s price ranged from $600 to $12000 on average. Guess what happened during the time period? Facebook rebranded as Meta, ramping up to pursue its ambitious Metaverse agenda. Facebook’s disclosure has played a significant role in boosting interest in the field among traditional institutions.
JP Morgan has clearly been interested in Metaverse’s prospects for a long time. The act is only now being carried out and publicized. According to the large bank, institutional acceptance will promote popular metaverse adoption. The recent collaboration of Adidas, Nike, Disney, and Samsung has stimulated further exploration.
Since its peak last year, the metaverse investment craze has not only shown no signs of slowing down, but has also grown exponentially with considerable force and rapid expansion. There have been numerous investment deals for hundreds of millions of dollars in the last three months.
The phrase “Metaverse” refers to the virtual environment in which land, buildings, avatars, and other items can be bought and sold. In this virtual world, users can engage with one another, visit buildings, buy goods and services, and attend events.
The impact of the epidemic is driving the metaverse’s explosion, as people are spending more time online and in virtual reality. In addition, the advancement of blockchain technology and NFT has driven this tendency.
NFTs are blockchain-based tokens. An NFT may represent a wide range of objects, but thus far the application has primarily concentrated on digital assets such as art, audio, video, video game items, and other types of creativity. Global corporations are incorporating NFT into their product lines and services, as well as creating their own Metaverses.
JP Morgan was not the first traditional finance institution to express interest in the Metaverse. There is a long array of prominent financial personalities in the United States who support the metaverse. Previously, Morgan Stanley argued that the metaverse would follow the next big crypto market trend. Meanwhile, Goldman Sachs forecasted that the Metaverse’s market cap might reach $8 trillion as a result of its opportunities and growing investor interest.
Another major bank in the US, Bank of America, noticed the Metaverse’s heat and expressed optimism in Bitcoin, Ethereum, DeFi, and NFTs. Bank of America has approved the trade of Bitcoin futures. Furthermore, the bank expressed its support for the potential benefits of Bitcoin legislation in El Salvador.
JP Morgan’s action has shook the world of traditional finance, and at the time of writing, some institutions may be developing their own strategy to keep up with the trend.
Say, Nicholas. JP Morgan Moves To Metaverse: Opening The First Virtual Bank Lounge In Decentraland. 18 Feb, 2022, https://blockonomi.com/jp-morgan-moves-to-metaverse-opening-the-first-virtual-bank-lounge-in-decentraland.