Binance has clarified that its new asset, BFUSD, is not a stablecoin, following confusion sparked by its promotional page. The asset, which promises an annual percentage yield (APY) of 19.55%, initially led many in the crypto community to label it as a high-yield stablecoin. However, Binance quickly set the record straight, explaining that BFUSD is a reward-bearing margin asset designed for futures trading.
“BFUSD is a reward-bearing margin asset for futures trading,” the exchange stated on X (formerly Twitter), addressing the growing misconceptions. However, the asset’s promotional materials still compared its yield to that of traditional stablecoins, fueling further buzz and speculation.
Despite the clarification, questions remain about how BFUSD generates such high yields. Binance has promised to provide more details soon, but at this stage, the specifics are unclear. The 19.55% APY has drawn comparisons to the now-defunct TerraLUNA stablecoin, which once offered similarly high returns through its Anchor Protocol.
Users can hold BFUSD in their “UM wallet” and receive daily rewards directly into their “UM Futures Wallet,” with no lock-up period, unlike traditional staking. The amount of BFUSD a user can earn is tied to their Binance VIP level, and certain limits may apply.
This announcement comes as the cryptocurrency industry continues to seek alternatives to traditional stablecoins. Binance’s new asset is being released in a market that includes products like BlackRock’s BUIDL and Ethena’s USDe, both of which offer new variations of dollar-pegged assets.
This move follows Binance’s decision to phase out its own stablecoin, BUSD, amid regulatory pressure, encouraging users to transition to First Digital USD (FDUSD). With BFUSD, Binance appears to be adopting a different approach, one that is already stirring considerable debate within the crypto space.
The future of BFUSD remains uncertain, but its eye-catching yield and innovative structure have already captured the attention of investors and industry watchers alike.
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