JPMorgan has become world’s first bank to enter a completely virtual world of the metaverse.
Within Decentraland, users can buy virtual plots of land in the form of NFTs and make purchases using cryptocurrency backed by the Ethereum blockchain.
Users have described their experience in the Onyx lounge on Twitter, noting the picture of CEO Jamie Dimon and a tiger lurking around. On top of that, the company released a paper explaining the opportunities they are exploring in the metaverse.
“There is a lot of client interest to learn more about the metaverse,” Christine Moy, JPMorgan’s head of crypto and the metaverse, said in an email. “We put together our white paper to help clients cut through the noise and highlight what the current reality is, and what needs to be built next in technology, commercial infrastructure, privacy/identity and workforce, in order to maximize the full potential of our lives in the metaverse.”
With the mainstream acceptance of things like non-fungible tokens (NFT), the past year has seen a breathless advance into the metaverse, fueled by integrated commerce applications. In January, electronics giant Samsung opened a version of its New York store in Decentraland and in November Barbados established a metaverse embassy, also in Decentraland.
JPMorgan 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.
“In time, the virtual real estate market could start seeing services much like in the physical world, including credit, mortgages and rental agreements,” said the JPMorgan report. It added that decentralized finance collateral management could well come into play, and that rather than traditional finance companies this could be done by decentralized autonomous organizations (DAO).
The JPMorgan report wasn’t all positive, however. In a section titled “Navigating hype vs. reality, “the report states,” despite much excitement about the possibilities of the Metaverse, in order to enable its full potential for engagement , community building, self – expression and commerce, key areas need to be further developed and matured, “pointing to flaws in the overall user experience, poor performance of avatars and difficulties with commercial infrastructure.
A Major Role in The Metaverse
In the bank’s announcement paper, JPMorgan revealed that its planning to “play a major role in the metaverse”. The banking agency explained that it plans to help deal with issues that the crypto space has, mainly fraud. Essentially, the bank wishes to behind a centralied service in a decentralised environment.
The bank’s Metaverse push is inspired by the explosion of Metaverse real estate sales. With some fake properties selling for more than real house prices, the bank wants to get a slice of that profitable pie.
“This democratic ownership economy coupled with the possibility of interoperability, could unlock immense economic opportunities, whereby digital goods and services are no longer captive to a singular gaming platform or brand,” The bank writes.
Of course, Metaverse popularity is low, and the idea of digital services transcending single games into all games isn’t going to happen.