Which Banks Are in the Metaverse as Web 3.0 Unfolds?
The metaverse appears to be among the most exciting investing themes for the next decade. Facebook, which is pouring billions of dollars into the metaverse even changed its name to Meta Platforms in 2021. Now, some banks are also experimenting with the metaverse. Which banks are in the metaverse and will more follow suit?
While several companies are getting excited about the metaverse and many see it as the future of the internet, many others believe that the venture is doomed to fail. However, the same would hold for most emerging industries. For example, all of the legacy automakers are investing in electric cars after initially dismissing them as a fad.
Which companies are betting on the metaverse?
Several U.S. companies spread across diverse industries are betting on the metaverse. Facebook, Nvidia, Nike, Roblox, Disney, Starbucks, and McDonald’s are some of the companies that are investing in the metaverse. The list isn't exhaustive and an increasing number of companies are pivoting towards the metaverse.
JPMorgan Chase became the first major bank to launch in the metaverse.
JPMorgan Chase, which is the largest U.S. bank, became the first major bank to set shop in the metaverse. In February 2022, the company opened the “Onyx lounge” in the metaverse. JPMorgan also released a paper highlighting the opportunities that it sees in the metaverse. The bank’s opinion about cryptos and digital assets has been quite nuanced.
JPMorgan was among the staunchest critics of digital assets and its CEO Jamie Dimon called cryptos “fraud” and worthless. However, the bank has since allowed some crypto services for clients and also invested in TRM Labs, a blockchain analysis firm.
While JPMorgan initially lagged behind peers on digital assets, it's trying to get the first-mover advantage when it comes to the metaverse. Warren Buffett, who's a known crypto critic, was once holding a significant stake in JPMorgan Chase.
Over the last few years, Buffett has been exiting stakes in several banks. He made an exception for Bank of America where he has increased the stake above 10 percent, which is something that he avoided previously.
HSBC was the second major bank to bet on the metaverse.
HSBC became the second major bank to bet on the metaverse. The bank purchased a plot on the Sandbox for an undisclosed sum and intends to “create innovative brand experiences for new and existing customers” through the platform.
Morgan Stanley hasn't announced metaverse plans.
Morgan Stanley hasn’t announced any plans about the metaverse yet. However, Morgan Stanley sees it as an $8.3 trillion market over the long term. It said the metaverse could eventually disrupt digital media and commerce in the same way streaming services shuttered video stores. Morgan Stanley listed two potential hurdles — the gradual improvement in the current digital media offering and privacy issues related to the metaverse.
Will more banks get into the metaverse?
Consumer companies have been interested in the metaverse. As the metaverse starts to gain traction, legacy banks wouldn't want to be left behind, especially since fintech companies might try to outsmart them.
For now, banks are taking baby steps towards their gradual foray into the metaverse. However, since banking is a tightly regulated and systemically important industry, regulators might also want to regulate banks’ metaverse plans.