Bybit, the world’s second-largest cryptocurrency exchange by trading volume, announced the launch of its Bank Triparty service, a regulated custody solution designed to help institutional investors manage counterparty risk while maintaining full trading access on Bybit. Bybit’s Bank Triparty framework addresses a core institutional requirement: maintaining collateral security without compromising access to trading liquidity.
Under the framework, eligible institutions deposit USD or U.S. Treasury Bills with Bybit’s designated banking partners, which are well-established international banking institutions. This step establishes the triparty arrangements and Bybit provides approved borrowing capacity. Institutions then receive USDT loans directly into their Bybit Unified Trading Account (UTA), unlocking immediate access to Bybit’s trading venues without requiring collateral transfer into alternative arrangements. The collateral remains in third-party custody during the term.
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By placing collateral with an independent regulated banking partner, Bank Triparty removes counterparty risk while preserving collateral security. In addition to enhanced custodian structure, institutions also continue to earn yield on collateral held with the banking partner during the borrowing period. Simultaneously, they unlock additional capital for deployment across Bybit’s spot, margin, perpetual, and options markets.
Bybit Bank Triparty Framework – Highlights:
- Counterparty risk mitigation: Counterparty risk is distributed off-exchange by having the collateral held with independent and regulated banking partners.
- Capital efficiency: Immediate USDT financing without collateral transfer or restructuring, reducing fees and potential delays.
- Yield preservation: U.S. Treasury Bill collateral continues accruing APR throughout the lending period.
- Bybit UTA integration: Borrowed USDT deposits directly into Bybit UTA, enabling institutions to deploy additional liquidity across spot, margin, perpetual, and options markets on Bybit without modifying existing infrastructure.
- Prudent risk parameters: Lower collateral-to-loan ratios backed by USD cash and U.S. Treasury securities.
Eligible institutional clients can initiate onboarding through their dedicated Bybit Relationship Manager.
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