Binance to Launch Stablecoin BFUSD for Futures Trading, Paying 19.55% Annual Interest

Cryptocurrency exchange Binance is preparing to launch a new stablecoin called BFUSD that will be used exclusively as collateral for futures trading, but will stand out for paying very high interest.

According to information posted on the Binance website, the world's largest cryptocurrency exchange has launched a new crypto coin called BFUSD, with an APY of up to 19.55%.

Although there are no specific details about BFUSD yet, based on the Binance website, the new coin will be a stablecoin backed by USDT. Binance users can convert between the two assets directly through the exchange, with limits depending on their account's VIP level.
BFUSD currently has a total supply of 20 million tokens, with a reserve fund of 1.1 million USDT.

BFUSD will only be used for trading on the Binance Futures platform, using it as collateral in Multi-Assets mode through the "UM Wallet". In particular, the exchange will also have a BFUSD-based reward mechanism for users based on daily trading activities.
The exchange website also claims that users who own BFUSD will not need to stake or lock assets to trade futures, BFUSD can be collateralized at a rate of up to 100%, as well as pay a higher APY than many other stablecoins on the market.

The APY Binance offers to BFUSD holders is currently 19.55%, but it is still unclear how the exchange can generate such a large profit for investors. Therefore, many people have begun to compare the exchange's new product with previously failed high-interest-paying stablecoin models such as Terra's UST (LUNA).

A Binance representative later issued a statement saying that BFUSD has not yet been officially launched, and dismissed the "stablecoin" label being applied to the coin, instead describing it as a "margin asset that generates rewards for futures trading." The exchange also pledged to provide more information on how interest is calculated to the community.

This is Binance's latest stablecoin effort since BUSD was forced to stop by the US government in 2023, forcing the exchange to switch to TUSD and then FDUSD.