NEW YORK – JPMorgan Chase became the first bank to open in the virtual world, Fortune reported on February 16, noting that the “investment banking giant… has set up shop in the Metajuku mall” and “the bank’s lounge features a spiral staircase, a live tiger, and an illuminated portrait of CEO Jamie Dimon.”
“JPMorgan’s newest digs aren’t located in the real world, but in Decentraland – one of the world’s most popular metaverse platforms,” Fortune reported, adding that “the bank’s metaverse launch coincided with the release of a paper by Onyx, JPMorgan’s blockchain arm launched in 2020, which explores the opportunities offered by the metaverse.”
JPMorgan “predicts that the metaverse will become a $1 trillion market opportunity in yearly revenues, given that its virtual worlds will ‘infiltrate every sector in some way in the coming years,’ says the report,” Fortune noted.
JPMorgan, “the first bank to set up a metaverse office,” is following “on the now well-trodden path of big brands, businesses, and influencers entering the metaverse,” Fortune reported, pointing out that “the metaverse is made up of not one, but various virtual worlds – popular ones being browser-based Decentraland; the Sandbox, owned by Hong Kong’s Animoca Brands; and Roblox, which is favored among kids and teens.”
“Users use digital avatars to explore these virtual lands, where they can socialize, play games, purchase real estate, browse art, or go shopping,” Fortune reported, adding that “in recent months, companies have rushed to enter the metaverse” including “retail and entertainment brands from Walmart and Nike to Disney and Warner Music Group.”
“Warner Music, the entertainment behemoth that’s home to a star-studded artist roster including Dua Lipa and Red Hot Chili Peppers, is currently building a concert-focused theme park on metaverse platform the Sandbox,” Fortune reported, adding that “luxury brand Gucci has purchased land on the same platform to develop a space to host ‘immersive experiences’ and offer digital fashion items for purchase, targeted at Gen Z.”
“The Sandbox has already cultivated over 200 partnerships with companies, brands, and individuals including rapper Snoop Dogg, sportswear firm Adidas, and gaming company Atari,” according to the report, Fortune noted.
“But companies from a wide array of industries are now finding use cases for the metaverse, including smaller firms from the architecture, real estate, and even tax and accounting sectors,” Fortune reported, adding that “the U.S.-based Prager Metis accounting firm, for instance, opened its three-story metaverse headquarters in Decentraland last month.”
“The company has been ‘constantly fielding inquiries from… clients trying to understand the metaverse from a financial and tax compliance perspective,’” Jerry Eitel, partner at Prager Metis told Fortune, noting that “every tax and accounting issue [applicable to businesses] in real life is also applicable to the metaverse.”
“Real estate has also boomed in the metaverse economies,” Fortune reported, noting that “virtual land sales have been driven by the growth of the ‘ownership economy’ in Web3, a new iteration of the internet that enthusiasts advocate as decentralized, equitable, and user-controlled.”
“Virtual real estate is a ‘growing market,’ says JPMorgan, and brands have contributed by ‘buying up space so they can create virtual stores and other experiences,’” Forbes reported, adding that “the average price for a parcel of virtual land doubled in just six months last year, surging from $6,000 in June to $12,000 by December across the four main metaverse platforms, says the report.”
“Last June, developer Everyrealm (formerly known as Republic Realm) bought a piece of Decentraland land for $913,000,” Fortune reported, adding that “the land has now been turned into the Metajuku shopping district, where JPMorgan’s lounge is located… The virtual real estate market will eventually ‘start seeing services like… credit, mortgages, and rental agreements,’ says JPMorgan.”
“The development of the metaverse economy has created jobs both online and offline,” Fortune reported, noting that “companies, from apparel to tech firms, are on a metaverse hiring spree” and “JPMorgan predicts that some individuals will become the ‘gig workers’ of the metaverse – earning income by providing services in the virtual world.”
“JPMorgan has been undertaking efforts to build out its blockchain and crypto expertise and infrastructure,” Fortune reported.
“In a Bloomberg interview, Onyx’s global head, Christine Moy, said that its unit is now focused on ‘providing infrastructure’ like blockchain and payments tech to clients, which include game publishers,” Fortune reported, adding that “Dimon’s bank isn’t the only one optimistic about the metaverse’s trillion-dollar opportunity: JPMorgan’s Wall Street rival Goldman Sachs forecasts the metaverse will become an $8 trillion market.”
“Still, metaverse bulls have been hit hard this year,” Fortune reported, noting that “shares of video game developer Roblox are down nearly 25% today, after releasing disappointing quarterly results,” and “Metaverse stocks have underperformed in 2022, with the Roundhill Ball Metaverse ETF (METV) down 15.3% year to date, compared with tech-heavy Nasdaq, which is down 13.5%.”