From theblock by MK Manoylov and Daniel Kuhn

Binance unveiled a forthcoming asset called BFUSD on Monday, which some onlookers said resembled a high-yield stablecoin. The crypto exchange giant later clarified that the asset, which will pay a 19.55% annual percentage yield, is not a stablecoin despite the "USD" suffix in its name.

"BFUSD is not yet launched. To be clear, it is not a stablecoin but a reward-bearing margin asset for futures trading," Binance wrote on X in response to a crypto news aggregator @zoomerfied that referred to the token as a "stablecoin."

However, as of 17:30 UTC, the fine print at the bottom of its webpage read: "Enjoy attractive high APY on your BFUSD holdings, surpassing the yields offered by many other stablecoins."

The token's unusually high APY drew a significant amount of attention, with some drawing comparisons to the defunct TerraLUNA stablecoin, which paid users yields around 20% via the Anchor Protocol. It is unclear how BFUSD will generate yield, though the company's customer support profile said on X  it "will be sharing more details soon including how APY is determined."

According to the asset's launch page, users can deploy BFUSD as collateral without "staking or locking up your funds." Instead, users will hold the asset in a "UM wallet" and accrue daily airdrops sent to their "UM Futures Wallet" based on hourly snapshots, according to the blog. Users will have a "limit quota of BFUSD" based on their "VIP level."

A number of firms have recently introduced tokenized products that are pegged to the U.S. dollar but are not often called stablecoins because they do not follow the traditional reserve-asset model pioneered by Tether and Circle. These assets include BlackRock's BUIDL token, an onchain money market fund that invests in short-dated United States Treasury bills, and Ethena's USDe "synthetic dollar" that uses an automated delta-hedging trading strategy to maintain its peg.