Dubai-based cryptocurrency exchange Bybit is joining forces with Copper, the digital asset custody firm chaired by former U.K. Chancellor Philip Hammond.
The tie-up will allow Bybit clients to reduce the settlement cycle for digital asset trades from four hours to two hours. The new settlement cycle boosts security, cuts down on counterparty risks, and improves capital efficiency.
With 2-hourly settlements happening 24/7, traders can enjoy uninterrupted trading and settlement services, allowing for more accurate record-keeping and a clearer view of their institutional balance on Bybit.
The collaboration leverages Copper’s ClearLoop product to achieve faster settlement times. The network also provides an off-exchange trading and settlement solution for institutional clients.
Institutional clients can securely store their digital assets in Copper’s MPC (multi-party computation) wallet, making it easier to trade and settle across different ClearLoop-connected exchanges. MPC is a cryptographic tech that improves on existing multi-sig methods, letting wallet keys be “split” between parties for added security.
“At Bybit, the security of our clients’ assets is always our top priority,” said Eugene Cheung, Head of Institutions at Bybit. “Bybit is thrilled to be the pioneer partner to leverage Copper’s latest ClearLoop product, achieving a remarkable 50% reduction in settlement times for digital asset transactions and unlocking new yield opportunities for our institutional clients. This game-changing collaboration empowers our clients to trade faster and navigate the digital asset landscape with greater efficiency.”
Custody and counterparty risk have become increasingly important for crypto investors since the collapse of FTX. ClearLoop addresses these concerns by allowing investors to hold onto their assets until just before a trade is executed. By connecting multiple exchanges within one trading network, ClearLoop reduces counterparty risk and eliminates the need to transfer assets to an exchange-based wallet.
From a post-trade perspective, more efficient asset transfers offer many advantages. The reduction in settlement time lowers the risk capital required to guarantee trades, resulting in greater capital efficiency. With reduced clearing fund requirements, the level of liquidity needed for settlement activity decreases, ensuring the continued availability of trade netting.
The partnership also comes at a time when Bybit is expanding its operations in Europe. The exchange has recently launched Bybit.nl in the Netherlands, a new local trading platform compliant with Dutch regulations.
In February 2024, Bybit adjusted some of its services, including discontinuing derivatives trading in the Netherlands, to align with the guidelines set by the Dutch central bank. This move follows similar actions by other major global exchanges like Binance and Gemini, which ceased operations in the Netherlands in 2023 to comply with local regulations.
Founded in 2018, Bybit has quickly risen to become one of the world’s top three cryptocurrency exchanges by trading volume, serving over 20 million users. The exchange’s daily spot turnover peaked at $4.2 billion today, trailing only behind Binance in terms of volume. It also boasts a partnership with Formula One’s Oracle Red Bull Racing team.
