Bybit Starts Selling Real Shares for USDC, Next to Its Own Stock Tokens

Bybit has launched trading in more than 1,000 United States stocks and exchange-traded funds funded with USDC, the dollar stablecoin, The Defiant reported. Alpaca, a brokerage infrastructure firm, executes the trades and holds the underlying shares. The service sits alongside Bybit's existing xStocks products, which are tokenised representations of shares that trade onchain.

That makes the same exchange a distributor of two different instruments that look similar on a phone screen. One is a conventional brokerage position, held by a broker, recorded in a brokerage account. The other is a token, transferable onchain, redeemable against shares held by an issuer's custodian. The screen shows a ticker and a price in both cases.

Why a crypto venue would run both

The two products solve different problems. A brokerage position gives a user the standard protections and the standard constraints: it settles when the market settles, it cannot be moved to a wallet, and it cannot be used as collateral in a lending protocol. A token can be moved and composed with other onchain applications, and it trades when the venue chooses rather than when the New York Stock Exchange opens.

Running both lets the exchange serve a user who wants exposure without onchain mechanics and a user who wants the token, without choosing between them. The funding currency is the bridge: in both cases the account is denominated in a stablecoin rather than in dollars at a bank.

Alpaca does the regulated part

The structure is worth being precise about. Alpaca executing and custodying the shares means the equities side runs on an existing regulated brokerage stack rather than on anything Bybit built. This is the pattern most crypto venues have used when adding real shares: the crypto firm supplies the front end and the funding rail, a licensed broker supplies execution, custody and the regulatory perimeter.

The background this lands in

The International Monetary Fund this week found real demand for tokenised stocks but described the market as more volatile and less liquid than conventional equities, with roughly $2.3bn outstanding and more than half of trading happening outside US market hours, according to reports by Decrypt and CoinDesk. A venue offering both formats is in effect offering users a choice between the thinner product that trades all hours and the deeper one that does not.

Kraken, meanwhile, is planning a United Arab Emirates launch after securing a full Dubai licence, with a rollout that includes dirham deposits and withdrawals, AED trading pairs, staking and xStocks, The Defiant reported. xStocks appearing on two separate exchange rollouts in the same week says something about how the tokenised equity supply side is being distributed: a small number of issuers, a growing number of venues.

What to watch

The question for anyone using either product is what they actually own and what happens if the venue fails. In the brokerage version the answer runs through Alpaca's custody and the usual brokerage protections. In the token version it runs through the issuer's reserve arrangements and whatever redemption right the terms grant. Those are not the same answer and they are not disclosed in the same place.

Whether users pick the shares or the tokens, when both are on the same screen at the same price, is the most useful piece of evidence this market is likely to generate in the next few months.