JP Morgan, one of the biggest financial institutions in the world, with nearly $4 trillion in assets under management, is the world’s first bank to enter the metaverse.
The Bank has also unveiled the Onyx lounge, which is the bank’s suite of permissioned Ethereum-based services. Onyx features a digital image of the bank’s CEO Jamie Dimon. Users can create their virtual avatars, build virtual spaces and roam in the lounge
The metaverse is a virtual world that encompasses all the new internet technologies, including online commerce and gaming, virtual gatherings, and digital currency.
JPMorgan noted in its whitepaper that the metaverse will almost certainly penetrate every sector in the coming years and especially in banking and finance. “When you consider the economics of the metaverse, there are potential in practically every market segment.”
JPMorgan also noted in its whitepaper that the average price for a plot of land in virtual worlds is steadily on the rise.
The Bank begins its assessment of “metanomics” by pointing out that the average price of a parcel of virtual land doubled in the latter half of 2021, jumping from $6,000 in June to $12,000 by December across the four main Web 3 metaverse sites: Decentraland, The Sandbox, Somnium Space and Cryptovoxels.
Business activities conducted in virtual domains, including virtual property development and management, will soon parallel those made in the physical world.
Rental agreements, mortgages and loans will soon become part of our collective virtual reality.
In January, electronics giant Samsung opened a version of its New York store in Decentraland, and in November, Barbados established a metaverse embassy.
What’s inevitable is the coming boom in virtual financial services. But what’s also inevitable is that most traditional banks are not moving fast enough to enter this lucrative space.
Just like in the real world, anyone who operates within the Metaverse could engage in financial transactions. Users will be able to buy virtual accessories, avatars, or even entire worlds/environments created by various companies and creators.
But traditional financial institutions have been sluggish in adopting new technologies. Most are still hovering on the periphery of the periphery of the decentralized finance sector. They are either dawdling around with small investments or waiting for regulations to pass.
Meanwhile digital banks will be in the perfect position to facilitate transactions in the metaverse and will establish themselves as major players.
NFTs will also be a significant part of the Metaverse. They could serve as a bridge between users and the Metaverse, as they will provide proof of ownership of digital products that exist only in the virtual world.
In the coming time, the metaverse would influence every sector and market in some way with an estimated yearly revenue of over $1 trillion.
The development of metaverse will help people build communities based on shared values, and to express themselves in original ways, from a social viewpoint.