The world's leading cryptocurrency exchange, Binance, recently announced the launch of its RWUSD product, and in this article, we explore its features. This is a financial product based on the growing trend of tokenization. Specifically, this offer provides returns of 4.2% APR compared to tokenized Treasury bonds and other real-world assets.
This service is presented as a continuation of the exchange's plans to integrate the trading of representations of off-chain assets into its platform. It is important to note that tokenization involves assets on the blockchain that represent assets off the blockchain, that is, in the real world.
According to the presentation, users of the mentioned exchange can subscribe to RWUSD using stablecoins like USDT and USDC. According to the company, RWUSD is issued at a 1:1 ratio to the spot rate held in users' accounts. Additionally, the subscription is free, facilitating quick and low-cost participation for those interested in this offer.
Redemption is only allowed in USDC at the same 1:1 ratio. This is irrespective of whether the initial deposit was made in this token or in USDT. With this, Binance's RWUSD product presents itself as an innovative offering that seeks to expose users to the rapidly growing tokenization sector.
Binance's RWUSD may become a popular commodity
It is worth noting that the availability of this new product depends on the user's region of residence. It is important to remember that in some regions, regulations concerning this type of financial service offering are strict. In any case, in the permitted regions, users can find it in the Binance Earn category.
Stake
It is worth noting that redemptions or withdrawals generally incur fees, depending on the time. For example, fast redemptions usually have a fee of 0.1%, while standard redemptions have a fee of 0.05%. However, the platform may waive fast redemption fees, partially or fully, at its discretion.
Binance highlights two elements of RWUSD that should be clear. The first is that it is not a stablecoin. Additionally, it does not offer ownership of any real asset. Instead, it can be classified as a kind of accounting record that reflects the user's capital and the rewards accumulated on the exchange's platform.
Unlike stablecoins, this product is not transferable within the platform nor can it be withdrawn on the blockchain. The only possible withdrawal option is within the service itself, in exchange for USDC. Despite this, it is similar to stablecoins, as it can be used as collateral for Binance's VIP loans.
