Binance Changes Entire SAFU Fund to USDC

Binance cryptocurrency exchange has changed its Secure Asset Fund (SAFU) to the USDC. The USDC is the second biggest stablecoin by market capitalization after Tether. Secure Asset Fund is an emergency insurance reserve developed as a backstop for those who utilize Binance. It is used to repay traders when the exchange loses investor assets.

To promote ‘stability and reliability,’ Binance has changed its whole insurance fund to BTC and BNB to USDC. This is what it means.

The fund constantly seeks to have a value of more than $1B. Before the conversion, it held BNB and BTC. CoinGecko shows that they were down 9.1% and 12.6% in the previous seven days, respectively. In turn, the exchange changed its balance to USDC to boost ‘stability and reliability.’

Secure Asset Fund to Protect Binance Users

In a blog post, Binance noted that the Secure Asset Fund is an emergency insurance fund created in 2018 to safeguard Binance users in extreme circumstances. Over the years, they have constantly monitored SAFU’s size, ensuring the balance at a level acceptable to protect users.

Nearly $1B of Bitcoin came out of the SAFU Bitcoin wallet, while BNB worth more than $740M left the Binance wallet. Block explorers indicate that the two sums moved to Binance hot wallet addresses. 

Currently, the SAFU Ethereum address has been left with $1B. A Binance representative said they have continued tracking the Security Asset Fund’s size over the years, sustaining the balance at a level acceptable to safeguard users. Despite the fluctuations, the level is set at $1 billion.

Crypto Twitter observers have speculated that the move concerns Binance taking returns compared to the fund’s reduced health. Despite Bitcoin’s latest dive, it remains higher than at the beginning of the year. 

Transferring assets into a stablecoin is frequently used to enhance a fund’s stability. This is because stablecoin seeks to maintain the value of fiat currency. 

Binance Embraces USDC Stablecoin

Unlike cryptocurrencies such as Bitcoin, the prices of stablecoins remain stable according to the fiat currency that supports them. Nevertheless, it is crucial to note that Binance preferred Circle’s USDC over Tether’s USDT, the biggest stablecoin with a market capitalization of more than $76M. 

According to the publication, Binance defended the decision by stressing that USDC is a ‘reliable, transparent, and audited stablecoin.’ 

Tether has a lengthy history of controversy, with opponents saying that real United States dollars do not support the stablecoin. According to many, this is the reason behind the occasional loss of its dollar peg. 

Tether has continually dismissed wrongdoing despite constant attacks by US legislators alleging it facilitates terror financing. The legal hurdles have yet to delay its course with USDT’s market value above $100 billion.