Crypto: Bybit’s Neobank Plans Test Crypto Exchanges’ Push Into Banking
Bybit’s upcoming neobank launch via Tether-backed Pave Bank highlights the regulatory hurdles and challenges that crypto exchanges face when entering traditional finance.
Bybit’s push to offer neobank-style services is testing how far crypto exchanges can expand into traditional finance (TradFi), highlighting regulatory hurdles and a growing reliance on licensed banking partners.
Bybit CEO Ben Zhou announced the exchange’s push into retail banking on Thursday, with a planned February launch of its retail banking product, MyBank. The move would mark one of the most ambitious attempts yet by a major exchange to offer bank-like services to retail users.
As crypto increasingly intersects with TradFi, industry observers and executives warned that Bybit’s neobank move could trigger major challenges as it enters largely uncharted territory for a crypto-native company in pursuing banking services.
“The idea of a crypto exchange expanding into ‘banking’ is conceptually feasible, but in practice extremely complex from a regulatory perspective,” Gal Arad Cohen, a blockchain lawyer and partner at the independent law firm S.Horowitz & Co, told Cointelegraph.
To offer banking services, Bybit must either partner with a licensed bank or obtain a full banking license, a years-long, capital-intensive process, Cohen said.
“No major global crypto exchange currently operates as a fully licensed bank in the traditional sense, offering deposit-taking and core banking services under its own license,” the lawyer added.
A Bybit spokesperson confirmed to Cointelegraph that the exchange is working with Pave Bank, a licensed lender based in Georgia, to support its retail banking offering.
Founded in Tbilisi, Georgia, in 2023, Pave Bank positions itself as a programmable bank for businesses, combining crypto and fiat services. That same year, it received a digital banking license from the National Bank of Georgia.
In 2025, Pave Bank raised $39 million in a Series A funding round from major industry players, including Tether Investments, the venture arm of Tether, which issues the world’s largest stablecoin, USDt (USDT).
Source: CoinTelegraph
