Binance Converts SAFU Assets to USDC for Stability: 3% of Circle’s Supply
Binance Converts SAFU Fund into USDC, Boosting Stability and Reliability
In a strategic move to enhance stability and reliability, Binance has announced the conversion of its Secure Asset Fund for Users (SAFU) into Circle’s USD Coin (USDC). This conversion, totaling $1 billion, now constitutes approximately 3% of Circle’s total circulating supply, which currently stands at $32.6 billion.
The decision to shift SAFU assets to USDC was highlighted in an official announcement by Binance on April 18. The exchange emphasized the critical role of SAFU in its ecosystem, stating, “SAFU continues to be a core part of our responsibility to the ecosystem, and we continue to evolve to meet market conditions head-on. Today, we are transferring 100% of SAFU’s assets to USDC.”
Established in 2018, SAFU serves as an emergency insurance reserve that safeguards Binance users from potential losses in extreme scenarios such as exchange breaches. Binance has consistently monitored the fund’s size to ensure it remains at a level sufficient to protect its users, with the usual target set at $1 billion.
The conversion process involved a transaction of 800 million USDC on the Ethereum network, along with the transfer of 1.36 million BNB valued at approximately $754 million and 16,277 BTC. This move aims to utilize a trusted, audited, and transparent stablecoin like USDC to maintain stability and reliability within the Binance ecosystem.
This marks the second conversion of the Binance insurance fund within just over a year. In March 2023, Binance had previously converted the fund from Binance USD (BUSD) holdings to Tether and TrueUSD (TUSD) due to regulatory pressures following issues with BUSD issuer Paxos.
Despite these changes, Tether remains the leading stablecoin globally with a circulating supply of $109 billion and a market share of 69%. Circle’s USDC, now accounting for approximately 20% of the market share, has seen a 33% surge in supply since December, solidifying its position in the stablecoin market.
Overall, the conversion of SAFU assets into USDC reflects Binance’s commitment to enhancing stability, reliability, and user protection within its platform, ensuring a secure environment for its growing user base.
