The most general quantum object that can be shared between two distant parties is a bipartite channel, as it is the basic element to construct all quantum circuits. In general, bipartite channels can produce entangled states, and can be used to simulate quantum operations that are not local. While much effort over the last two decades has been devoted to the study of entanglement of bipartite states, very little is known about the entanglement of bipartite channels. In this work, we rigorously study the entanglement of bipartite channels as a resource theory of quantum processes. We present an infinite and complete family of measures of dynamical entanglement, which gives necessary and sufficient conditions for convertibility under local operations and classical communication. Then we focus on the dynamical resource theory where free operations are positive partial transpose (PPT) superchannels, but we do not assume that they are realized by PPT pre- and post-processing. This leads to a greater mathematical simplicity that allows us to express all resource protocols and the relevant resource measures in terms of semi-definite programs. Along the way, we generalize the negativity from states to channels, and introduce the max-logarithmic negativity, which has an operational interpretation as the exact asymptotic entanglement cost of a bipartite channel. Finally, we use the non-positive partial transpose (NPT) resource theory to derive a no-go result: it is impossible to distill entanglement out of bipartite PPT channels under any sets of free superchannels that can be used in entanglement theory. This allows us to generalize one of the long-standing open problems in quantum information - the NPT bound entanglement problem - from bipartite states to bipartite channels. It further leads us to the discovery of bound entangled POVMs.
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