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Binance Converts $1 Billion to USDC for SAFU, Now Holding 3% of Stablecoin’s Supply

Binance supplements the SAFU with a hefty sum in USDC

In a strategic move, Binance has converted its entire $1 billion emergency fund into USD Coin, which now accounts for 3% of the total circulating supply of the stablecoin.

Key takeaways:

  • Binance’s $1 billion SAFU now fully converted into USD Coin, comprises 3% of its supply.
  • The transition aims to enhance the fund’s reliability by leveraging a more transparent and audited stablecoin.

Binance, the world’s largest cryptocurrency exchange, has announced a significant transition of its Secure Asset Fund for Users (SAFU) to Circle’s USD Coin (USDC), making up 3% of the stablecoin's circulating supply. Initiated in 2018, SAFU serves as an emergency insurance fund designed to protect Binance users from potential losses due to exchange hacks or other unforeseen events.

The exchange stated on April 18, "We are transferring 100% of SAFU’s assets to USDC," highlighting the move as a step towards "making use of a trusted, audited, and transparent stablecoin for SAFU," which further bolsters its commitment to maintaining the fund's value at $1 billion. This development reflects Binance’s adaptive strategy in response to evolving market conditions and regulatory environments.

Details of the SAFU conversion and market implications

The conversion process included significant transactions involving multiple cryptocurrencies: a transfer of 800 million USDC on Ethereum was completed at 02:35 UTC with a transaction fee of just $1.88, according to Etherscan. Additionally, 1.36 million BNB worth approximately $754 million and a transfer of 16,277 BTC were part of this strategic shift.

This adjustment marks the second conversion of the fund in just over a year, following the replacement of Binance USD (BUSD) holdings with Tether (USDT) and TrueUSD (TUSD) in March 2023, after regulatory pressures on the BUSD issuer Paxos. The shift to USDC places Binance's SAFU among significant holders of the stablecoin, which currently has a total supply of $32.6 billion and holds a market share of about 20%, compared to Tether’s dominant position at $108 billion and 69% market share.

This strategic pivot by Binance underscores its proactive approach to safeguarding user assets through reputable and stable financial instruments, reinforcing its position in the competitive cryptocurrency exchange landscape.