JP Morgan sees US$1 trillion opportunity in the emerging Metaverse

Posted: 17 February 2022 8:56 am

young woman in virtual reality

The big bank opened a hub and outlined a host of profitable future enterprises that await businesses (and maybe you) in the multifaceted Metaverse.

JP Morgan, the largest US bank, became apparently the first bank to jump into the Metaverse by opening its Onyx lounge in Decentraland’s Metajuku mall.

The bank also released a report that explores US$1 trillion worth of opportunities that companies and individuals might find within these fledgling virtual worlds.

What is the Metaverse?

Being so early in its evolution, there is no clear definition of the Metaverse or its eventual scope.

Roughly, the Metaverse can be summarised as a digital place where you can work, play, socialise or purchase goods and services. While today we have mostly separate social media sites, communication apps and multiplayer games, the Metaverse will combine these in one place, often negotiated using virtual reality headsets or other tools.

JP Morgan believes there will continue to be multiple digital worlds within this Metaverse concept. Examples of such emerging worlds include Decentraland (MANA) and Sandbox (SAND).

From Web 2.0 to Web 3.0

One of the main features of the Metaverse, JP Morgan says, will be its integration with blockchain technologies. The blockchain part gives access to cryptocurrency tokens that can be used to vote on the governance of the particular digital world, making that world “decentralised”.

Integrating blockchain within the virtual worlds helps creators turn assets and avatars into non-fungible tokens (NFTs), which are growing in popularity with each passing day.

JP Morgan sees multiple opportunities

In the report, JP Morgan sees many opportunities with this Metaverse that can help businesses cut costs and reach a wider audience. These can also provide career opportunities for a host of individuals. These are among the main areas now being explored:

  • Virtual real estate
  • Decentralized finance services (DeFi) with collateralized lending, potentially in the form of virtual land and real estate
  • Decentralised autonomous organisations (DAOs) that could operate those financial services
  • Creator opportunities for such things as selling virtual merchandise and playing music at virtual parties
  • Branding opportunities for individuals and companies
  • Business-to-business opportunities for virtual meetings and product presentations
  • Virtual showrooms to save retailers the cost of running multiple physical stores

Keep in mind, someone will get paid to set up those events, showrooms and parties. There will be new jobs and careers in all these areas, JP Morgan suggests.

It’s not all roses in the Metaverse

JP Morgan’s report does point out the Metaverse hasn’t quite arrived yet.

“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,” the report says.

In other words, we’ll have to improve on the following areas:

  • Technology
  • Infrastructure
  • Privacy and identity
  • Workforce of the future
  • Regulation, tax, accounting and social infrastructure

The bank concludes that “the costs and risks of engaging early and consistently in order to build internal intellectual property, develop hypotheses about future business models, and identify ecosystem partners and collaborators are relatively low.”

And that “the asymmetrical risk of being left behind is worth the incremental investment needed to get started and to explore this new digital landscape for yourself.”

In short, jump in now and don’t be left behind.

Kliment Dukovski doesn’t own any assets mentioned in the article as of the publishing date.

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