JP Morgan dives into metaverse with Onyx lounge in Decentraland
Bank aims to win business opportunities in Web3
US financial giant JP Morgan has opened a lounge for its blockchain-focused Onyx division in the 3D virtual world, Decentraland.
The New York-headquartered bank believes the metaverse is likely to infiltrate every sector in some way in the coming years, with the market opportunity estimated at over $1trn in yearly revenues.
It believes its core strengths in cross-border payments, foreign exchange, financial assets and trading, as well as its consumer foothold, can play a major role in the metaverse.
The Onyx unit was formed in 2020 to provide solutions for the challenges related to digital information exchange, money movement and asset digitisation.
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Advertising in the metaverse
In an 18-page report accompanying the Land purchase, the financial giant mentions that brands such as Walmart, Nike, Gap, Verizon, Hulu, PwC, Adidas and Atari have already dipped their toes in the metaverse.
“It will be interesting to see how marketing and advertising pan out, as it is potentially one of the biggest segments of the meta-economy,” the report says.
“There are huge opportunities for branding and immersive ad experiences in virtual worlds due to the mass audiences available. In-game ad spending is set to reach $18.41bn by 2027.
“From a corporate perspective, there are opportunities to massively scale. Instead of having stores in every city, a major retailer might build a global hub in the metaverse that can serve millions of customers. Beyond retailers, the metaverse will turbocharge the shift in gaming, sports betting and gambling from cash to crypto.”
However, the bank underlined the importance of regulation to support a clear taxation system for the metaverse.
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“Despite much excitement about the possibilities of the metaverse, to enable its full potential for engagement, community building, self-expression and commerce, key areas need to be further developed and matured,” it says.
Decentraland choice
While most of the brands diving into metaverse have chosen Sandbox, JP Morgan chose its main rival, Decentraland.
“Decentraland are already selling virtual plots that people can develop. Virtual real estate is a growing market. The average price of a parcel of land doubled in a six-month window in 2021. It jumped from $6,000 in June to $12,000 by December across the four main Web 3.0 metaverses,” the paper states.
“Partly this growth has been because brands have been buying up space so they can create virtual stores and other experiences.”
As JP Morgan reported in June 2021, one land package in Decentraland was sold for $913,000, with developer Every Realm, formerly Republic Realm, turning it into an entire shopping district, Metajuku, inspired by Japan’s Harajuku shopping district.
At the time of writing, MANA, the coin powering Decentraland, is trading higher by 6.8% at $3.26 with a market cap of just under $6bn and a 24-hour trading volume of $1.2bn, roughly 90% up on the previous 24 hours.
You can visit the JP Morgan Onyx lounge in Decentraland here.
