JP Morgan Launches Virtual ‘Onyx’ Lounge Within Decentraland, Releases Paper Discussing Web3 Potential

JP Morgan, the largest bank in the US, has launched a lounge in the blockchain-based virtual world Decentraland, making it the first major bank in the metaverse. Called the ‘Onyx’ lounge which refers to the bank’s existing suite of permissioned Ethereum-based services, JP Morgan also released a paper exploring how businesses can find opportunities in the metaverse. JP Morgan’s Onyx lounge resides in Metajuku mall, a virtual version of Tokyo’s Harajuku shopping district with Twitter users claiming that visits to the lounge reveal a roaming tiger at the entrance and a digital portrait of Jamie Dimon, the CEO of JP Morgan.

The paper released by the bank points out that JP Morgan can operate as a bank in the virtual world much like it does in the real world since the virtual worlds in the metaverse have their own population, GDP, and currencies. Similar to its role as a bank, it can facilitate cross-border payments, foreign exchange, financial assets creation, and trading and safekeeping.

“When you think about the economics of the metaverse — or metanomics — there are opportunities in almost every market area.” the bank wrote in its paper. “We are not here to suggest the metaverse, as we know it today, will take over all human interactions, but rather, to explore the many exciting opportunities it presents for consumers and brands alike.”

The metaverse, JP Morgan said, has a market opportunity of $1 trillion (roughly Rs. 75,00,000 crore) in yearly revenue, as creators tap Web3 to monetise their work in new ways.

“This democratic ownership economy coupled with the possibility of interoperability could unlock immense economic opportunities, whereby digital goods and services are no longer captive to a singular gaming platform or brand,” according to the report.

The bank cited household names such as PWC, Walmart, Nike, Verizon, Gap, Adidas, Hulu, and Atari as early adopters and investors in the blockchain economy.

Within just six months in 2021, the average price of a plot of virtual land across the four main Web3 metaverses — The Sandbox, Decentraland, Cryptovoxels, and Somnium Space — doubled to $12,000 (roughly Rs. 9 lakh) from $6,000 (roughly Rs. 4.5 lakh), the report noted. JP Morgan also sees a new workforce and more virtual concerts like Ariana Grande’s.

“We are now at an inflection point, where it seems that not a day goes by without a company or celebrity announcing that they are building a presence in a virtual universe,” the report said.

The hype around the metaverse jumped after Facebook rebranded to Meta as a sign of its push into virtual worlds, JP Morgan said, noting the price of tokens backing metaverses like Decentraland, the Sandbox, and Somnium Space surged following the announcement.