The launch of Bybit's upcoming neobank through Tether-backed Pave Bank signifies the significant obstacles and difficulties that crypto exchanges encounter when venturing into conventional finance. This underscores the complex regulatory landscape with key challenges in compliance and oversight that exchanges must navigate. The move showcases the evolving intersection between cryptocurrency and traditional banking, with Bybit aiming to address these hurdles through strategic partnerships. The integration of neobanking services into the crypto exchange space presents a unique opportunity for Bybit to tap into the traditional finance market.