In Decentraland, a blockchain-based community, the Wall Street bank has established a lounge.
JPMorgan, the nation's largest bank, announced that it has created a lounge in Decentraland, a virtual world based on blockchain technology, making it the first lender to enter the metaverse.
JPMorgan also released a study analysing how businesses might identify opportunities in the metaverse, in addition to the launch of the Onyx lounge (the name refers to the bank's suite of permissioned Ethereum-based services).
In an email, Christine Moy, JPMorgan's head of crypto and the metaverse, stated, "There is a lot of client enthusiasm to understand more about the metaverse." "In order to leverage the full potential of our lives in the metaverse, we put together our white paper to help clients break through the noise and highlight what the current reality is, as well as what needs to be constructed next in technology, commercial infrastructure, privacy/identity, and workforce."
With the general acceptance of non-fungible tokens (NFT), the metaverse, a catch-all for immersive gaming, world-building, and entertainment, has experienced a frantic surge in the past year, fuelled by integrated commercial applications. Samsung opened a Decentraland counterpart of its New York shop in January, and Barbados established a metaverse embassy, also in Decentraland, in November.
JPMorgan starts its analysis of "metanomics" by noting that the average price of a virtual plot of land doubled in the second half of 2021, rising from $6,000 in June to $12,000 in December across the four major Web 3 metaverse sites: Decentraland, The Sandbox, Somnium Space, and Cryptovoxels.
"In time, the virtual real estate market might see services similar to those found in the physical world," such as credit, mortgages, and rental agreements,” said the JPMorgan report. It went on to say that decentralised finance (DeFi) collateral management might play a role, and that this could be handled by decentralised autonomous organisations rather than traditional finance businesses (DAO).
Work in the metaverse will be profitable, said the report, citing a variety of entertainment providers as well as apps like RTFKT, a virtual shoe designer recently bought by Nike. Another significant investment will most likely be in advertising, according to the bank, which estimates that in-game ad spending would reach $18.41 billion by 2027.
The JPMorgan report aimed to contrast the hype surrounding the metaverse with reality, arguing that many areas require improvement. The overall user experience and avatar performance, as well as commercial infrastructure, are among them.
"We believe the present virtual gaming landscape (each virtual world with its own population, GDP, in-game currency, and digital assets) contains characteristics that resemble the existing global economy,” according to the bank report. "This is where, in addition to our at-scale consumer presence, our long-standing core expertise in cross-border payments, foreign exchange, financial asset creation, trading, and safekeeping can play a crucial role in the metaverse."
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