[_jsmh]

An unusual property of this mechanism of creating a stablecoin is that the bank no longer holds the funds that back the stablecoin. There's no possibility of the bank locking up the funds of a company that issued a stablecoin.

It's the burn and mint used in Luna Classic, now in physical form.

[grafmax]

I understand the conversion from dollars to coin. What about coin to dollars? There’s a floor but no ceiling, so I don’t see how this is a real peg.

[etskinner]

They address this on the site:

>bUSD is not a stablecoin. It can never be redeemed for USD, and may trade at values other than $1 for extended periods of time.

[scyclow]

Frankly, this is better than a stablecoin since the value is locked on the blockchain forever no matter what.