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

Banks

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.

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.

Twitter was acquired by X Corp both to ensure freedom of speech and as an accelerant for X, the everything app. This is not simply a company renaming itself, but doing the same thing.

The Twitter name made sense when it was just 140 character messages going back and forth – like…
— Elon Musk (@elonmusk) July 25, 2023

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.

$44 billion bank PacWest Bancorp $PACW crashed over 25% today

Is the next banking collapse starting right now? pic.twitter.com/lOopnmCXvB
— Crypto Rover (@rovercrc) July 25, 2023

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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<div>Commonwealth Bank to enable crypto trading for 6.5M Aussies, 'other banks will follow'</div>

ANZ

The CBA stated that it will support 10 crypto assets in its banking app, including Bitcoin, Ethereum, Bitcoin Cash and Litecoin.

The Commonwealth Bank of Australia (CBA) is set to launch crypto trading services for the 6.5 million users of its CommBank app.

The CBA will become the first bank in Australia to support crypto, and Blockchain Australia says it is “inevitable” that the other ‘big four’ banks including National Australia Bank (NAB), Australia and New Zealand Banking Group (ANZ) and Westpac will soon follow suit.

According to a Nov. 3 announcement, the CBA has partnered with the Gemini crypto exchange and blockchain analysis firm Chainalysis to launch its crypto services. The bank will launch a pilot for a limited number of customers in the coming weeks, before rolling out the full service in 2022.

Ten crypto assets will be supported in its banking app, with Bitcoin (BTC), Ethereum (ETH), Bitcoin Cash (BCH) and Litecoin (LTC) named at this stage.

Steve Vallas, CEO of Blockchain Australia told Cointelegraph that this move was “extraordinarily important” as the big four banks in Australia “underpin our national and international reputation as a financial services destination.”

“The confidence that this provides local digital asset sector participants will be dwarfed by the impact that this signal sends around the world that Australia should be a destination for cryptocurrency and digital asset adoption.”

Vallas believes the rapid growth and adoption of crypto has “shifted the risk of maintaining a wait and see approach” in the view of the big banks to a risk of “inaction” and being left behind. Vallas believes it is only a matter of time before the other major Australian banks launch their own crypto services.

“It is inevitable that the other banks will follow suit. Clarity in the local regulatory landscape is emerging with issues such as licensing being tackled head on by industry and by Governments. That impediments to action and participation are being removed,” he said.

Caroline Bowler, the CEO of local crypto exchange BTC Markets echoed similar sentiments to Vallas, noting that “with regulation in the offing and the largest bank in the country allowing it, the floodgates are now open for more appetite from traditional finance.”

“CBA's move is exciting and inevitable. It's yet another 'red-letter day' for crypto and it is as though Australia has suddenly put the lead foot down. We have been touted as playing catch up all this while, but now we're moving into a leadership position globally with our largest bank.”

Dave Abner, the Global Head of Business Development at Gemini said that his firm was “proud” to be working with CBA to launch world leading crypto services.

“The exponential growth of digital assets internationally, coupled with Gemini’s institutional-grade security and proactive regulatory approach, positions this partnership to set a new standard for banks and financial platforms in Australia and across the globe,” he said.

Not everyone was pleased with CBA’s partnership however, with Adrian Przelozny the CEO of Australian crypto exchange Independent Reserve expressing his dismay over the bank partnering with an overseas firm.

“It’s disappointing that CBA went with an overseas player and didn’t engage with local players at all. We will be reaching out to the other Australian banks now,” Przelozny said.

Cointelegraph reported on Oct. 15 that Allan Flynn, a Canberra-based Bitcoin trade settled his first complaint at the ACT Civil and Administrative Tribunal against ANZ for de-banking him in 2018 and 2019 due to his occupation as a Digital Currency Exchange (DCE).

While ANZ denied any liability, the bank offered him a chance to reapply for a bank account, suggesting that the bank is more open to crypto than it was two to three years ago. Flynn also has a similar case against Westpac ongoing.

Commenting on today’s news, Flynn told Cointelegraph that the crypto landscape in Australia is rapidly changing:

“There a lot of things suddenly happening in the Australian Bitcoin space; you have the Senate inquiry, ANZ’s acknowledgment of a legit human rights question to be answered in my complaint, AUSTRAC’s extraordinary statement on de-banking last Friday and now CBA’s digital currency plans being unveiled.”

“I’m just here arguing my lawful human rights and hoping it makes a difference,” he added.

Westpac