Binance, the cryptocurrency industry's largest exchange, has launched a new fixed-income investment product, RWUSD. According to an announcement on July 28th, RWUSD aims to offer investors an annual interest rate (APR) of up to 4.2%, based on the returns of real-world assets (RWA), particularly tokenized US Treasury bonds.
What is RWUSD? How does it work?
RWUSD is described as a principal-protected product offered by the Binance Earn platform. Users can subscribe to this product with USDT or USDC and in return receive a one-to-one RWUSD balance in their spot accounts. Interestingly, this product is not traded as a stablecoin or tokenized asset; RWUSD merely represents users' investments and the returns they receive from these investments. Therefore, it cannot be transferred, bought, sold, or taken off the platform.
Another notable feature of the product is that it serves as collateral. This means that RWUSD can be used as collateral by users seeking loans under Binance VIP Loans. Furthermore, they continue to earn interest during this process. Returns earned with RWUSD are calculated daily and transferred to users' spot accounts as RWUSD. Investors can exit in two ways: standard or fast:
In a standard exit, RWUSD is converted to USDC within three days with a 0.05% fee and transferred to the account.
In a fast exit, the conversion is instantaneous, but this transaction carries a 0.1% fee.
On some days, Binance may even offer free quotes for fast exit transactions. The personal investment limit is quite high: users can invest up to $5 million in RWUSD and earn a fixed APR return on this amount.
What is RWUSD not?
Binance emphasizes that RWUSD is not a stablecoin, security, fund, or on-chain asset. Users do not have a direct claim on any real-world asset. In this respect, RWUSD is not an investment product in the traditional sense; A record of earnings and collateral within Binance.
RWUSD is a continuation of similar products previously offered by Binance, such as BFUSD and LDUSDT. Binance Vice President of Product Jeff Li stated, “With RWUSD, users can earn relatively stable returns regardless of market conditions. The positive feedback we've received for BFUSD and LDUSDT shows we're on the right track in developing RWUSD.”
As a result, RWUSD has become one of Binance's next-generation products that offer crypto users access to real asset returns without being decentralized. Its appeal to investors seeking fixed returns and its ability to be used as collateral have attracted attention. However, before investing in RWUSD, users are advised to carefully read the relevant risk disclosures and terms. It's important to note that APR rates are subject to change at Binance's discretion and that the product is subject to certain regional restrictions.
