Binance has communicated its plans to introduce LDUSDT, a new token intended as a reward-earning margin asset for Futures trading, as announced on April 9.
The platform clarified that LDUSDT is more than merely a trading instrument; it also provides a means to generate passive income. Users can engage in futures trading while simultaneously accruing yields.
LDUSDT
As a margin asset, it can be utilized with a variety of supported trading pairs and in multi-asset modes. This functionality offers users the ability to keep their trading strategies adaptable without compromising their potential earnings.
In the meantime, this asset follows the introduction of BFUSD, another margin token that rewards users. Both BFUSD and LDUSDT are designed to produce annual percentage yields (APY) through Binance’s internal hedging and investment processes.
Although an official launch date is not yet set, Binance has indicated that LDUSDT will soon be available on its website and app.
Once released, users interested in this new offering will have the opportunity to convert their USDT from Binance’s Simple Earn Flexible Products into LDUSDT.
‘Not a stablecoin’
Even though LDUSDT is pegged to USDT in value, Binance has made it clear that it should not be regarded as a stablecoin.
The exchange stated:
“LDUSDT is not a stablecoin but a crypto asset that can be used as Futures trading margin, while also allowing users to earn Simple Earn Real-Time APR rewards.”
Stablecoins are typically linked to fiat currencies like the US dollar and are supported by reserves such as cash or Treasury bonds. These assets aim to maintain price stability and have emerged as one of the industry’s key use cases in recent years.
This distinction made by Binance is particularly significant as US regulators heighten their scrutiny of yield-generating stablecoins.
Presently, legislative proposals regarding stablecoins in the US Congress specifically exclude interest-bearing varieties, and the US Securities and Exchange Commission (SEC) has not provided clarity on such products.
However, Coinbase CEO Brian Armstrong has advocated for more flexible regulations, suggesting that allowing interest on digital currencies could bolster the economy and enhance financial accessibility.