Bybit Launches Bank Triparty Service, Enabling Institutions to Manage Counterparty Risk with Regulated Custody

Bybit, the world’s second-largest cryptocurrency exchange by trading volume, has launched a Bank Triparty service aimed at institutional investors. The solution allows eligible institutions to deposit collateral—either in USD or U.S. Treasury Bills—with independent, regulated banking partners. Bybit then provides approved borrowing capacity, and institutions receive USDT loans directly into their Bybit Unified Trading Account (UTA), granting immediate access to trading on the platform without needing to transfer collateral from the custody arrangement.

The core innovation addresses a key institutional concern: counterparty risk. By holding collateral off-exchange with a third-party custodian, the framework ensures that funds remain secure even if the exchange faces issues. At the same time, clients can continue earning yield on their U.S. Treasury Bill collateral during the borrowing period, potentially improving capital efficiency. Bybit states that the USDT financing is available without requiring collateral restructuring, reducing both fees and delays.

Key Features of the Bank Triparty Framework

• Counterparty risk mitigation: Collateral is held with independent, regulated banking partners, keeping exposure off-exchange.
• Capital efficiency: Institutions receive immediate USDT loans without moving or transforming their collateral.
• Yield preservation: U.S. Treasury Bills continue to accrue interest over the duration of the loan.
• Seamless UTA integration: Borrowed USDT is deposited directly into the institutional client’s Unified Trading Account, enabling deployment across spot, margin, perpetual, and options markets.
• Prudent risk parameters: Lower collateral-to-loan ratios are supported, backed by USD cash and Treasuries.

Eligible institutional clients can initiate onboarding through their dedicated Bybit Relationship Manager. The exchange has not publicly named the banking partners but describes them as “well-established international banking institutions.” The service underscores Bybit’s efforts to bridge traditional finance and decentralized finance (DeFi) by offering regulated custody solutions alongside its full suite of trading products. Bybit was founded in 2018 and now serves over 80 million users globally.