Binance Launches BFUSD Stablecoin with Up to 19.55% Interest

Binance launches BFUSD, promising an attractive yield of 19.55% APY, although details on the source of the yield have not been released.

Azcnews Binance Launches Bfusd Stablecoin With Up To 19.55% Interest

Cryptocurrency exchange Binance has just introduced BFUSD, a new stablecoin with an expected yield of up to 19.55%/year. However, Binance said that BFUSD has not yet been officially deployed on the blockchain.

Unlike traditional stablecoins, BFUSD is designed as a yield-earning asset, pegged to the US dollar. Binance has pledged to provide specific information on how this impressive yield is achieved soon.

BFUSD: A Potential Competitor to Ethena USDe?

BFUSD is being compared to Ethena’s USDe, a yield-earning asset based on the Ethereum funding rate. Initially, BFUSD will only operate within the Binance ecosystem and act as collateral.

How BFUSD Works

Bfusd Stablecoin Parameters
Bfusd Stablecoin Parameters

Users can purchase a limited amount of BFUSD to earn passive rewards. Yields are calculated based on the lowest balance of the day, through an hourly snapshot mechanism. In addition, BFUSD can be used as collateral in yield pools or integrated on Binance Launchpad to support startups.

Binance aims to encourage users to hold BFUSD for more than 24 hours and at the same time provides flexible features to optimize the use of this asset.

Challenges and concerns

However, BFUSD is not compliant with the European Union’s MiCA regulation because it is collateralized by cryptocurrency, which means that users in this region cannot earn passive interest.

BFUSD’s high interest rate of up to 19.55% has also raised concerns in the community, with many comparing it to the failure of UST under the Luna ecosystem. Notably, Binance has not yet disclosed the source of this yield. Most likely, the attractive interest rate comes from the exchange’s marketing budget.

Binance To Launch Stablecoin Bfusd For Futures Trading, Paying 19.55% Annual Interest
Binance To Launch Stablecoin Bfusd For Futures Trading, Paying 19.55% Annual Interest

BFUSD is backed by a reserve fund of up to 1.1 million USDT, which acts as over-collateral to maintain stability. In the first phase, Binance plans to issue 20 million BFUSD to ensure the sustainable development of the project.

Challenging future

Currently, BFUSD is still awaiting approval from US regulators. The commitment to a high interest rate may be a major barrier to gaining market acceptance.

However, after Binance announced BFUSD, the price of BNB rose to $621.93 and remained above $600. Although Binance is considered the center of innovation in the cryptocurrency field, high-yield mechanisms like BFUSD still face a lot of doubts from the community.

(1 vote)

2.0/5

(1 vote)

Latest

Bybit Ceo Two Thirds Of Lazarus Stolen Funds Still Traceable

News | Editor Choice | Policy & Regulations

Bybit CEO: Two-Thirds of Lazarus-Stolen Funds Still Traceable

Ben Zhou, CEO and co-founder of the cryptocurrency exchange Bybit, revealed that more than two-thirds of the digital assets stolen during a February cyberattack — allegedly carried out by North Korea’s Lazarus Group — remain traceable.

Nft Project Seeks Funding To Buy Cold War Era Nuclear Bunker

News | Editor Choice | NFT

NFT Project Seeks Funding to Buy Cold War-Era Nuclear Bunker

A doomsday-themed NFT project on the Solana blockchain is planning to sell 100,000 non-fungible tokens (NFTs) to raise funds for purchasing a Cold War-era nuclear bunker located in Rutland, England.

Zora Announces Token Listing And Airdrop

Altcoin | Editor Choice

Zora Announces Token Listing and Airdrop

The Layer-2 solution on the Ethereum network, Zora, has officially announced that the token listing date is set for April 23, 2025, along with details about the airdrop allocation.

Bitcoin Halving Cycle No Longer The Magic Wand

News | Bitcoin | Editor Choice

Bitcoin Halving Cycle: No Longer the “Magic Wand”?

While halving remains a foundational element of Bitcoin’s design, this cycle reveals a new reality: price surges are no longer guaranteed, and the market is now more responsive to macroeconomic cues than to predictable supply shocks.

How To Participate In Linera Airdrop (2)

Airdrops | Editor Choice

How to Participate in Linera Airdrop (2)

Join the Linera Airdrop hunt! The project has successfully raised $12 million and is allowing users to earn points and Discord roles.