Since I have been told to somehow prove that the grammar indeed generates the language describe, I am adding that in the form of an answer.
Breaking the language into 6 subsets (not mutually exclusive) and giving rules for generating each. The first two cases generate all those words such that $|x| \ne |y|$
Case 1: $|x| > |y|$
$\begin{align*}
X_{Longer} &\to (0 \mid 1) \space X_{Longer} \space (0 \mid 1) \\
X_{Longer} &\to (0 \mid 1)^+ \space \$
\end{align*}$
Case 2: $|x| < |y|$
$\begin{align*}
Y_{Longer} &\to (0 \mid 1) \space Y_{Longer} \space (0 \mid 1) \\
Y_{Longer} &\to \$\space(0 \mid 1)^+
\end{align*}$
The next 4 cases generate words where the first mismatch occurs at the $(|x| - n + 1)$-th character of string $x$ and $n$-th character of string $y$ for all $n > 0$. (Note, $(|x| - n + 1)$-th character of string $x$ is the same as saying $n$-th character of $x^R$)
The rules have names of the form $M_{c, l, r}$ where $c$ is the character which repeats consecutively $n$ times toward the front and back of the $\$$ before the mismatch. $l$ and $r$ are the mismatching characters in $x$ and $y$ respectively.
Case 3: Words of the form $(0\mid1)^*\space 0 \space 1^n\space\$ \space 1^n \space 1 \space (0\mid1)^*, \forall n \geq 0$
$M_{1, 0, 1} \to (0\mid1)^*\space 0 \space O \space 1 \space (0\mid1)^*$
Case 4: Words of the form $(0\mid1)^*\space 1 \space 1^n\space\$ \space 1^n \space 0 \space (0\mid1)^*, \forall n \geq 0$
$M_{1, 1, 0} \to (0\mid1)^*\space 1 \space O \space 0 \space (0\mid1)^*$
Case 5: Words of the form $(0\mid1)^*\space 0 \space 0^n\space\$ \space 0^n \space 1 \space (0\mid1)^*, \forall n \geq 0$
$M_{0, 0, 1} \to (0\mid1)^*\space 0 \space Z \space 1 \space (0\mid1)^*$
Case 6: Words of the form $(0\mid1)^*\space 1 \space 0^n\space\$ \space 0^n \space 0 \space (0\mid1)^*, \forall n \geq 0$
$M_{0, 1, 0} \to (0\mid1)^*\space 1 \space Z \space 0 \space (0\mid1)^*$
And to complete, there's the $O$ and $Z$ rules
$\begin{align*}
O &\to 1\space O \space 1 \\
O &\to \$ \\
Z &\to 0\space Z \space 0\\
Z &\to \$
\end{align*}$
So the starting non-terminal is:
$S \to X_{Longer} \mid Y_{Longer} \mid M_{1, 0, 1} \mid M_{1, 1, 0} \mid M_{0, 1, 0} \mid M_{0, 0, 1}$