Crypto Biz: Elon Musk’s X targets financial services, PacWest emergency rescue and more

Social media platform X — formerly known as Twitter — may soon advance plans to add financial services to its users, hoping to become the American equivalent of the Chinese super-app WeChat.

The concept of super-apps isn’t new. Tech giant Tencent, the company behind WeChat, has been refining the model since 2011. Like Twitter, it began as a social networking platform but quickly became the go-to app for everything in China, from shopping to filing for divorce with one click.

Musk believes that, if executed correctly, X could capture “half of the global financial system.” To accomplish that and keep his promise of delivering an “entire financial world” on the platform, the executive might include cryptocurrencies in its plans. There was even a hint that Dogecoin (DOGE) would be a part of it.

As the “global town square” where most crypto business and innovation takes place in real-time, X could play a crucial role in the crypto industry’s future. X is bigger than just a re-branding and could affect the future of money in the Western world.

This week’s Crypto Biz explores Elon Musk’s plans for X, the Italian central bank’s take on DeFi, PacWest’s merger with Banc of California and more.

Elon Musk says X will offer an “entire financial world” in the coming months

Twitter’s rebrand to X is part of a larger plan to incorporate financial services on the platform, its owner and chief technology officer Elon Musk said. According to Musk, users of X can expect to access an “entire financial world” on the platform in the coming months. In the upcoming “everything app,” digital assets are unlikely to be forgotten, with Musk suggesting that Dogecoin (DOGE) could play a key role in X services. Also, in April, he announced that the platform would soon offer crypto and stock trading through a partnership with eToro. Musk claims that, if executed correctly, X can encompass “half of the global financial system” with plans for banking, payments and more. 

Italian central bank backs DeFi tokenization project with Polygon, Fireblocks

The Italian central bank is embracing decentralized finance. The institution recently picked a decentralized finance (DeFi) project to help financial institutions get started with DeFi and tokenized assets. The project is developed by Cetif Advisory in collaboration with Polygon Labs, Fireblocks and other organizations. Italian banks, asset management companies and 10 other financial institutions will participate. The project has no “commercialisation purpose” but will extend “the scope of analysis” of security tokens on secondary markets — an area of growing interest within the crypto industry. 

PacWest stock flash crash recovers after rescue merger with Banc of Cali

Shares in PacWest bank briefly crashed by 27% on July 25 only to quickly recover on the news it had merged with the Banc of California, with both banks seemingly looking to shore up following the banking industry turmoil in early 2023. The banks combined are expected to have around $36 billion in assets and over $25 billion in total loans. PacWest’s market capitalization is around $1.2 billion, while Banc of California’s was roughly $764 million. The merger was backed by two private-equity firms, Warburg Pincus and Centerbridge, which will provide $400 million in equity, giving them around a 19% stake in the combined business. 

Crypto investors cool on Bitcoin funds, turning to Ether and XRP

Bitcoin-related investment products appear to have lost some of their sheen among crypto investors, recording their first week of outflows since BlackRock filed for spot Bitcoin ETF in June. According to a report from CoinShares, Bitcoin (BTC) investment products saw outflows of $13 million for the week ending July 21, reversing five weeks of inflows. Short Bitcoin products also saw outflows of $5.5 million in the week. In contrast, Ether (ETH) and XRP (XRP) investment products recorded a combined inflow of $9.2 million over the last week. Altcoins Solana (SOL) and Polygon (MATIC) have tracked some inflows as well, potentially benefiting from Ripple’s partial victory over the U.S. Securities and Exchange Commission. However, Bitcoin remains the dominant digital asset investment product, with $558 million in inflows in 2023.

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