When Binance is no longer comfortable with USDT – USDC,
BNB Chain chooses to: create its own stablecoin.
The issue is: will “U” be the new backbone or the next disaster?
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1️⃣ “U” WAS CREATED TO SOLVE WHAT ISSUE?
📌 In reality, BNB Chain is facing:
• Liquidity heavily depends on USDT / USDC
• External stablecoin → control risk
• DeFi on BNB Chain lacks strategically important stablecoins
👉 Stablecoin “U” was born to:
• To be used as a primary payment unit
• Neo DeFi liquidity
• Keeping cash flow within the BNB system
👉 To put it bluntly:
BNB Chain does not want to “nurture” liquidity for others' stablecoins anymore.
2️⃣ HOW IS “U” DIFFERENT FROM USDT – USDC?
👉 The biggest strength of “U”:
BNB Chain can optimize incentives, farming, lending revolving around “U”.
👉 The fatal weakness:
If transparency is unclear → trust = 0
3️⃣ THE ISSUE EVERYONE THINKS BUT DOESN'T WANT TO SAY
❗ What is “U” backed by?
• Cash?
• Bonds?
• Crypto?
• Or… algorithmic mechanisms + trust?
👉 After UST – Terra, the market is allergic to ambiguous stablecoins.
Stablecoins do not die due to price.
Stablecoins die due to loss of trust in a moment.
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4️⃣ DIRECT IMPACT ON BNB
🔥 Positive scenario
• “U” is widely used
• DeFi TVL increases
• The demand for BNB as gas + staking increases
👉 BNB benefits in the long run
💥 Negative scenario
• Liquidity is forced to rotate internally
• DeFi only “lives on incentives”
• If “U” encounters issues → BNB takes the first hit
👉 Stablecoins tightly bind the system → profits and risks go hand in hand
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5️⃣ THE STORY OF POWER BEHIND IT
• Binance has been tightened by external stablecoins
• Having a separate stablecoin = reducing dependency, increasing sovereignty
• This is not just a DeFi product
👉 but a strategic move
But:
The greater the power → the greater the responsibility → making one misstep can lead to disaster.
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6️⃣ CONCLUSION 😈
• “U” could be the new backbone of BNB Chain
• Or it could also be a gamble of trust
• Stablecoins do not need to fly
👉 just need to hold steady – but holding steady is the hardest part
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❓QUESTION THAT NEEDS ANSWERING:
• Would you dare hold stable “U” instead of USDT?
• Stablecoins issued by ecosystems → innovation or disguised risk?
• If “U” fails → Where will BNB go?
