Coinbase (COIN), Bybit said to be working together on tokenization, custody and distribution of U.S. stocks

Crypto exchange Coinbase (COIN) is working with Bybit, one of the largest crypto trading platforms, to explore ways to tokenize, custody and distribute assets such as U.S. public and pre-IPO stocks, a person familiar with the plans told CoinDesk.

The talks, which are ongoing, do not involve any sort of stake acquisition or similar deal for Bybit to enter the U.S., said the person, who asked to remain anonymous because they are directly involved in the discussions, dismissing a report of an investment publicized last month.

It makes sense for Bybit to partner with an American company, the person said, because the U.S. is home to certain assets that global users want. Bybit is international, while Coinbase is U.S.-focused.

Working together, the two can bring U.S. assets to a wider market in, for example, Asia, according to the person. Within five years, tokenization will bring any asset to users globally through a single app.

“Even if Coinbase becomes a super app in the U.S., they are still only in the U.S,” the person said.

The two companies’ explorations into tokenized stocks come as other market participants explore similar link-ups. Intercontinental Exchange (ICE), the owner of the New York Stock Exchange, in March announced it was taking a stake in crypto exchange OKX. Just last week, Deutsche Boerse, made a $200 million strategic investment into Kraken.

Bybit’s plan to enter the U.S. market does involve a local partner, but it’s not Coinbase, the person said.

The new U.S.-focused joint venture, said to be spearheaded by former Bybit co-CEO Helen Liu, will involve an unidentified “local partner who is going to provide license and compliance.” Bybit will to provide tech, product and liquidity.

Bybit and Coinbase both declined to comment.