Cryptocurrency exchange Coinbase (COIN) is working with Bybit, one of the largest cryptocurrency trading platforms, to explore ways to tokenize, custody and distribute assets such as U.S. public stocks and pre-IPO shares, a person familiar with the matter told CoinDesk.
The person, who requested anonymity because he was directly involved in the discussions, said the talks are ongoing and do not involve any form of equity acquisition or similar transaction for Bybit to enter the United States, and denied an investment report published last month.
The person, who declined to reveal the identity of the partner, said Bybit does plan to enter the United States, just not with Coinbase. It will allegedly create a new entity led by former Bybit co-CEO Helen Liu. Local partners will provide licensing and compliance, while Bybit provides technology, products and liquidity, the person said.
Discussions between Bybit and Coinbase are more global in nature, with Bybit’s global reach, particularly in regions like Asia, where users may want to access tokenized versions of U.S. stocks. As a result, the two companies are exploring future synergies surrounding the custody and distribution of these assets.
The person said the United States has certain assets that users around the world want. Bybit is international, while Coinbase is US-focused. This person said that cooperation between the two can promote U.S. assets to a broader market. Within five years, tokenization will bring any asset to global users through a single application.
“Even if Coinbase becomes a U.S. super app, they’re still only in the U.S.,” the person said.
The two companies’ exploration of tokenized shares comes as other market players explore similar connections. Intercontinental Exchange (ICE), owner of the New York Stock Exchange, announced in March that it would take a stake in cryptocurrency exchange OKX. Just last week, Deutsche Börse made a $200 million strategic investment in Kraken.
Bybit and Coinbase declined to comment.
Correct (April 20, 14:03 UTC): Correct the spelling of “Liu” in the second bullet point.
Update (April 20, 14:50 UTC): Add the Coinbase-Bybit relationship in the United States, and Bybit’s U.S. entry plans begin in the third paragraph.
