Mizuho Bank: Musk's X Money Could Disrupt US Payment Market and Challenge PayPal

BlockBeats News, April 16th. According to The Block, Mizuho Bank research analysts released a report on Thursday stating that X Money, the financial feature launched by Musk's X platform, has the potential to disrupt the U.S. payment industry, but its cryptocurrency integration plan may face regulatory obstacles. Mizuho analysts Dan Dolev and Andrew Jenkins wrote in a client report that X Money is positioned as the financial infrastructure layer of the X platform, aiming to integrate instant messaging, bank deposits, and business transaction features, similar to the "super app" model of WeChat Pay or Alipay. With the X platform's monthly active user base of 500-600 million and Musk's background as a co-founder of PayPal, "X Money has the potential to disrupt the U.S. payment industry."

On the regulatory front, analysts pointed out two main potential obstacles: firstly, the recent "CRYPTO Bill" proposed by the state of New York intends to criminalize unlicensed virtual currency business operations in the state, raising the compliance threshold for X's future cryptocurrency integration plans; secondly, the "Clarity Act" may restrict non-bank financial platforms from offering yield to users, potentially hindering X Money's planned 6% cash balance annual percentage yield offering to users. The timing of the introduction of this yield product is described by the analysts as "particularly sensitive."

Mizuho simultaneously downgraded PayPal (PYPL) stock rating to "Neutral," stating that PayPal and its Venmo app "face the most direct substitution risk as X is targeting the same peer-to-peer transfer and digital wallet entry points." This week, the X platform also launched a new feature called "Cashtags," allowing users to directly view financial data for stocks and cryptocurrencies within the timeline.