Bybit’s move to introduce neobank-style services is testing the limits of how far crypto exchanges can extend into traditional finance, underscoring regulatory complexities and a growing dependence on licensed banking partners.
Bybit CEO Ben Zhou announced Thursday that the exchange plans to launch a retail banking product, MyBank, in February. If successful, the initiative would represent one of the most ambitious efforts by a major crypto exchange to provide bank-like services directly to retail users.
As crypto firms increasingly intersect with traditional finance, industry executives and legal experts cautioned that Bybit’s neobank push places the exchange in largely uncharted territory for a crypto-native company seeking to offer regulated financial 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 independent law firm S. Horowitz & Co., told Cointelegraph.
Bybit partners with Pave Bank
To offer banking services, Bybit must either obtain a full banking license or partner with an institution that already holds one—a process that is typically lengthy and capital-intensive, 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,” he added.
A Bybit spokesperson confirmed that the exchange is working with Pave Bank, a licensed lender based in Georgia, to support its retail banking offering.
Founded in Tbilisi in 2023, Pave Bank markets 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, issuer of the world’s largest stablecoin, USDt.
Industry cautions on full-service banking ambitions
The scope of Bybit’s long-term banking ambitions remains a key question for industry observers.
“If they want to operate in the US and pursue a US banking charter—which would surprise me but is possible—they will face significant structuring challenges,” Ryne Saxe, co-founder and CEO of blockchain company Eco, told Cointelegraph.
Several major exchanges, including Binance, Coinbase and Kraken, have previously rolled out bank-adjacent features such as fiat on- and off-ramps, payment accounts and debit cards. However, operating as a fully fledged bank is a fundamentally different undertaking, according to Yuriy Brisov, a lawyer at Digital & Analogue Partners.
“It is logical that crypto firms will compete more directly with banks in 2026–2027,” Brisov said. “However, the closer a platform gets to offering full-service banking, the more traditional banking burdens it inherits,” he added, citing capital and liquidity requirements, sanctions compliance, operational resilience and liability for incidents.
Bybit’s push also reflects the broader convergence between crypto and traditional finance. Petr Kozyakov, co-founder and CEO of payments platform Mercuryo, said crypto companies are increasingly moving into TradFi, while legacy financial institutions continue to explore crypto services.
Megan Knab, CEO of Franklin, described the shift as part of the rise of “embedded finance,” where users could eventually be abstracted away from complex money movement, enabling borderless, near-instant payments to become the norm.
Retail users may face tighter compliance
While Bybit’s banking ambitions could streamline fiat-to-crypto transactions, they may also introduce new trade-offs for retail users.
Nick Denisenko, co-founder of digital finance platform Brighty, warned that the exchange’s move into banking could “create more problems than benefits” by imposing stricter Know Your Customer (KYC) requirements.
“A lot of users choose crypto exchanges—especially Asian platforms—because onboarding is simple and KYC requirements are relatively light compared to traditional banks,” Denisenko told Cointelegraph, adding that deeper integration with banking systems could erode one of crypto’s key user advantages.
“If Bybit goes down this route, it would be the first major exchange to seriously try it, and I’m not sure that’s what most retail users are asking for right now.”
