Binance's BFUSD token has sparked discussions even before its official launch. Promising attractive APY without staking or locking funds, BFUSD has become the talk of the day.
New Asset by Binance
Binance introduced BFUSD on Monday, positioning it as an asset with a 19.55% yield. This is not a traditional stablecoin but a reward-bearing asset. Users can earn daily rewards by simply holding BFUSD in their UM wallets without staking or locking funds. BFUSD maintains stability through a 105.54% collateralization ratio and a reserve fund containing 1.1 million USDT as of November 17, 2024.
Comparisons with UST and Community Reactions
Upon BFUSD's announcement, the crypto community began drawing parallels to the ill-fated UST stablecoin from Terraform Labs, which offered a 20% yield before collapsing in May 2022. However, Binance clarified that BFUSD is a reward-bearing margin asset for futures trading, not a stablecoin.
BUSD History and Regulatory Attention
Previously, Binance had used the BUSD stablecoin, but due to regulatory pressure, Paxos stopped its issuance in February 2023. Consequently, Binance phased out BUSD in favor of First Digital's FDUSD stablecoin. By December 2023, Binance had fully ceased support for BUSD.
Binance's BFUSD has garnered attention for its high APY and has been the subject of comparisons with past experiences in the crypto industry. The crypto community is closely monitoring this new initiative.
