JP Morgan Opens Onyx Lounge, Becomes First Bank in Metaverse

By opening a lounge in Decentraland, an Ethereum-based metaverse built on blockchain technology, JPMorgan, one of America’s largest banks, becomes the first major banking behemoth to establish itself in the Metaverse, as it seeks to profit on metaverse’s ‘limitless’ opportunities. JPMorgan’s Onyx Lounge is located in Metajuku, a virtual version of Tokyo’s Harajuku shopping district. On the first floor, a tiger roams the halls, while a portrait of the bank’s CEO, Jamie Dimon, hangs on the wall. The second floor is reached through a winding staircase, where a person’s avatar can watch experts discuss the economics of cryptocurrencies.  Besides unveiling its Onyx Lounge which refers to the bank’s suite of permissioned Ethereum-based services, JPMorgan has also presented a paper analyzing how businesses can discover opportunities in the metaverse. The report states,  “The Metaverse will likely infiltrate every sector in some way in the coming years, with the market opportunity estimated at over $1 trillion in yearly revenues.”  Further continuing that $54 billion is already being spent on virtual goods each year. The report mentions that the average price of the land multiplied from $6,000 to $12,000 between June and December last year. The report also predicts the in-game advertising spending that will reach approximately $18.4 billion per annum by 2027.  The widespread acceptance of new use cases in the crypto space, such as the NFTs (non-fungible tokens), Metaverse, and their application to gaming, world-building, and entertainment; over the last few years has accelerated the global adoption of cryptocurrencies as a household name. Due to these cases, the crypto space is on the verge of becoming mainstream propelled by integrated commerce applications based on blockchain technology.  Citing the cases of Adidas and Nike’s move to create NFT-based products and shopfronts, and Samsung’s creation of Metaverse store are significant strides of adoption, according to JPMorgan. He believes that the tremendous interest of brands in the Metaverse is increasing mainstream adoption.  To emphasize the point, Disney’s newly appointed Mike White is set to lead the Metaverse strategy. A memo by Disney CEO Bob Chapek states that Disney is looking to expand its storytelling prowess to the digital sphere.  “Today, we have an opportunity to connect those universes and create an entirely new paradigm for how audiences experience and engage with our stories,” said Chapek. The JPMorgan paper also attempts to illustrate the “metaverse hype versus the reality,” suggesting the many areas that require improvement. These include the overall user experience, digital avatars performance, and commercial infrastructure. “Despite much excitement about the possibilities of the Metaverse, in order to enable its full potential for engagement, community building, self-expression and commerce, key areas need to be further developed and matured.” As Facebook rebranded to Meta, as a symbol of stepping into the virtual worlds; hype around Metaverse has driven higher. JPMorgan notes that the price of tokens supporting metaverses such as Decentraland, the Sandbox, and Somnium Space surged as well and other companies like Microsoft and Nike also followed suit. Brands, everywhere, are looking to capitalize on metaverse’s potential. 

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