By: Ken Chase
JPMorgan Chase has become the first U.S. bank to enter the newly emerging metaverse, unveiling its virtual “Onyx lounge” in the blockchain-based virtual world Decentraland. The move comes as the nation’s largest bank by assets has been increasing its involvement in blockchain technologies like cryptocurrencies.
The lounge bears the same name as the bank’s Onyx blockchain unit and appears to be the latest indication of JPMorgan’s effort to avoid being left behind by the ongoing digital revolution. Moreover, a newly releasedJPMorgan reporthighlights the bank’s approach to the emergingmetaverse economy:
“The success of building and scaling in the metaverse is dependent on having a robust and flexible financial ecosystem that will allow users to seamlessly connect between the physical and virtual worlds. Our approach to payments and financial infrastructure will allow that interoperability to grow.
We believe the existing virtual gaming landscape (each virtual world with its own population, GDP, in-game currency and digital assets) has elements that parallel the existing global economy. This is where our long-standing core competencies in crossborder 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.”
In its report, JPMorgan said that the metaverse represented a market opportunity valued at more than one trillion dollars annually. In addition, the report’s authors noted that virtual land prices doubled in value during a six-month period in 2021, and cited what they called “explosive interest” in the emerging metaverse environment.
While observers have rushed to focus on the opportunities offered by the metaverse, some critics have cited a number of potential concerns. These risks include privacy concerns, the need to protect personal data, and cybersecurity issues. In addition, transactions within the metaverse tend to rely on non-fungible tokens (NFTs) and various cryptocurrencies that continue to draw scrutiny from governments.
With its tentative entry into the metaverse, however, JPMorgan Chase seems to be signaling its commitment to being a part of the virtual banking and commerce revolution. As the technology continues to evolve and consumers become more comfortable with the new virtual environments, that commitment could yield huge dividends for companies like JPMorgan.