Posted at 7:00 a.m.
As JPMorgan this week became the first major North American bank to dive into the metaverse, the Canadian financial community is watching the evolution of this virtual universe with interest.
Faced with a phenomenon that is gaining more and more momentum, the Mouvement Desjardins claims to “closely follow the technology of metaverses”.
“But we have no projects at this time,” says spokesperson Jean-Benoit Turcotti. “This is a technology in its infancy for which we are exploring the codes of use for a financial institution. »
The management of a major Canadian bank stresses that it is following the situation “very closely”. However, this banking institution does not want to be officially cited because it considers that it is still “too early” to do so.
By opening a “branch” in the popular virtual world Decentraland, JPMorgan is taking a giant step towards this virtual universe, says Martin Lalonde, manager of a cryptocurrency fund for the firm Investissements Rivemont, in Outaouais.
PHOTO ROBERT SKINNER, LA PRESSE ARCHIVES
Martin Lalonde, manager of a cryptocurrency fund for the firm Investissements Rivemont
JPMorgan has named its “virtual antenna” Onyx, in reference to the name given by JPMorgan to its electronic payment platform based on blockchain technology.
The US bank estimates that the metaverse represents a potential business opportunity for companies worth an aggregate of US$1 trillion in annual revenue.
Virtual world, real money
“If indeed there is a digital alternative economy, possibly there will be digital banks in the metaverse, says Martin Lalonde. Financial institutions will want to participate as transaction intermediaries. »
Tech entrepreneur Louis Cléroux, founder of the fintech Montreal-based Timechain, maintains that banks must be present in the metaverse. “This is where the new generation will stand. This is where the customers of the future are going to be. If you are not there, this clientele will escape you,” he says.
PHOTO MARCO CAMPANOZZI, PRESS ARCHIVES
Louis Cléroux, founder of the fintech Montreal Timechain
Banks have so many opportunities to make money in the metaverse. The most obvious is related to the location purchased, which will increase in value over the years.
Louis Cléroux, founder of the fintech Montreal Timechain
To illustrate his point, he cites the example of singer Snoop Dogg, who recently said that he had bought virtual land on the Sandbox platform. “People immediately started speculating and buying land around paying millions of dollars to be near Snoop Dogg’s virtual castle. »
The other obvious way to make money, according to Louis Cléroux, is related to users who will prefer to turn to a bank that considers the metaverse to be real because these people hold bitcoins and ethereum and will want to have services banks with their cryptocurrency. “They might also want to buy mutual funds with bitcoins or whatever. Being in the metaverse is really the best signal you can send to the market to seduce this community. »
Despite all the enthusiasm generated by the metaverse, Martin Lalonde admits to having been surprised this week to learn of the arrival of JPMorgan in this virtual universe.
“It was a big surprise. But American financial firms cannot afford to miss the boat on anything,” he adds.
“It is certain that the metaverse will evolve, but we do not know what form it will take. Banks create services whenever there is something new. If this service works, they benefit from it. »
Not for tomorrow in Canada
A bit like for cryptocurrency a few years ago, Martin Lalonde says he remembers that the banks all said no. “But now they all have dedicated blockchain and cryptocurrency teams. For the metaverse, there are two possibilities. They will all be there, or else we have just fallen into exaggeration and we will soon witness the end of a bull market that has lasted for two years with virtual universes. It is difficult to say which of the two scenarios will be the correct one. »
Martin Lalonde doubts that a financial institution here will imitate JPMorgan.
Maybe one day, but in Canada, he says, they have a monopoly. “Competition is very weak. Innovation is not necessary. Just in terms of cryptocurrency and custody, it’s long overdue. We often lag behind, but on the other hand, that means that our institutions are very solid financially,” says this expert.
Already paying more than music
The metaverse will likely infiltrate every industry in one way or another in the coming years, argues JPMorgan in a 20-page report on the metaverse it just released.
JPMorgan adds that US$54 billion is already spent on virtual goods each year, which is twice the amount spent on buying music.
It is also mentioned that the average price of virtual land doubled in six months last year, from US$6,000 to US$12,000.
Eventually, the virtual real estate market may begin to see services similar to those in the physical world, including credit, mortgages and leases.
JPMorgan, in a report
JPMorgan categorizes games as Fortnite, Roblox, World of Warcraft and Second Life as examples of virtual worlds related to web 2.0 while it links the universes of Decentraland, Somnium Space, The Sandbox and Cryptovoxels to web 3.0 due to the characteristics of platforms and user interaction.
Like JPMorgan, the insurer Axa announced on Friday the acquisition of land in the metaverse to help the company “familiarize” itself with this universe, better judge business opportunities and cultivate a “tech” image. with a view to recruitment.