Crypto Derivatives Exchange Bybit to Settle Options Contracts in USDC

The company will be using the second-largest stablecoin by market cap for its relative stability.

AccessTimeIconJun 29, 2022 at 3:49 p.m. UTC
Updated May 11, 2023 at 6:04 p.m. UTC
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Crypto derivatives exchange Bybit said it is offering options contract settlement using USD coin (USDC).

The exchange said in a press release that USDC, a stablecoin pegged 1:1 to the United States dollar and the second largest by market capitalization, will enable stable prices for the duration of each contract.

Most crypto options are margined and settled using the same currency. For example, if bitcoin (BTC) is used as collateral in a contract, it will also be used as the settlement currency. Bybit says its move to settle using USDC is a first for crypto options trading.

The settlement date is the date when a trade is final, and the buyer must make payment to the seller while the seller delivers the assets to the buyer. Options contracts and other derivatives have settlement dates for trades in addition to a contract's expiration dates.

Bybit’s choice to use USDC for contracts because of its stability unfolds against a bear-market backdrop of stablecoin doubts. In May, Terra's UST, then the third-largest stablecoin by market cap, crashed to near zero from its dollar peg. Tether (USDT), the largest stablecoin, lost $10 billion in market capitalization the same month when investors started to redeem the tokens.

Amid the general crypto market volatility, USDC is being seen as a more reliable and transparent option, according to analysts.

Bybit collateral

Bybit currently supports USDT, BTC, ether (ETH) and USDC as collateral, with more assets to be added, it said. Under the newly launched unified margin account, users of Bybit’s European-style, USDC-settled options will also be able to use all assets under their account as collateral to trade USDC options contracts and perpetuals.

“Our derivatives platform has the world’s best liquidity and tightest spread, so traders are ensured the best quote and best execution in the market even during extreme volatility,” said Ben Zhou, co-founder and CEO of Bybit, in the press release.

The announcement comes a week after Bybit announced it would be reducing its workforce and consolidating teams to improve efficiency.


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Jimmy is a CoinDesk markets reporter.

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