JP Morgan joins metaverse, highlights the role banks can play in virtual economies

After marriages and malls in the Metaverse, now banks are setting up shop in the virtual world. JP Morgan Chase & Co, one of the leading banks in the US, has opened a virtual lounge called Onyx on Decentraland,  a blockchain-based virtual world, where visitors will be greeted by a virtual avatar of Jamie Dimon, CEO of the bank.

Visitors will also have to choose a digital avatar that will represent them in the metaverse. They can choose the gender,  skin tone, hairstyle, clothes and accessories. 

JP Morgan has also related a whitepaper on the opportunities in metaverse and how business can leverage it. The whitepaper says that existing virtual games, which have their own population, in-game currency, economy and digital assets that parallel the existing global economy. “This is where our long-standing core competencies in cross-border payments, foreign exchange, financial assets creation, trading and safekeeping,  in addition to our at-scale consumer foothold, can play a major role in the metaverse,” it added. 

Interest in metaverse has skyrocketed in the last one year, especially with the growth in sale and purchase of non-fungible tokens (NFT), which is expected to play a key role in attracting people to the metaverse. Alread, many of the metaverses are allowing customers to buy assets in NFTs. A case in point is Metamall, a shopping mall in the metaverse where anyone can buy, own, sell virtual real estates like shops or offices as NFTs. Various celebrities such as actor-turned-politician Kamal Haasan in India and model Paris Hilton in the US have created their metaverse to sell their digital collectibles as NFTs.

In 2021, the trade volume of NFTs crossed over $23 billion, according to Dappradar. Similarly, in India,  the interest shown in metaverse and NFTs was the fifth highest in the world last year. JP Morgan in its whitepaper also said that NFTs currently have a market cap of $41 billion. They added that every year, $54 billion is spent on virtual goods while GDP for Second Life, a metaverse game, was $650 million in 2021 and nearly $80 million was paid to creators. 

Facebook’s ambitious plan to become a metaverse company and launch a virtual and augmented realit-based metaverse platform in the next few years has also spurred massive interest in the technology. Other big tech companies including Microsoft have also talked about their metaverse projects and splurged billions of dollars in mergers and acquisitions to support them.