Breaking News: Binance Converts its Billion Dollar Safu Fund to USDC
The world’s largest cryptocurrency exchange, Binance, has converted the entire pool of Secure Asset Fund for Users (SAFU) into the stablecoin USDC issued by the US company Circle Internet Financial.
SAFU is an emergency fund, with its opening price on January 29 valued at US$1 billion. It was established by Binance in July 2018 to protect users' funds.
Today, all SAFU assets will be converted to $USDC, bolstering reliability and stability at $1bn.
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In an announcement, as seen on the Binance blog, the firm explained that SAFU continues to be a significant part of its responsibility to the ecosystem and will continue to evolve to meet market conditions.
The crypto exchange further said it would transfer 100% of SAFU’s assets to USDC, making use of an "audited" and "trusted" stablecoin. This further enhances its reliability and ensures it remains stable at $1B.
Prior to the conversion, the fund's wallets contained assets such as Bitcoin (BTC), Binance's native BNB token, Tether's USDT stablecoin, and TrueUSD (TUSD) stablecoin. The market volatility and fluctuating price of cryptocurrencies have urged Binance to convert its SAFU asset to a single stablecoin.
The largest exchange by trading volume is eyeing reliability and stability by using USDC, a stablecoin, to pursue price stability. Since the USDC stablecoin is pegged to the US dollar and a safer alternative to Tether's USDT due to its strong emphasis on regulatory compliance.
In November 2022, amid the FTX crisis, Binance rushed to top the SAFU asset in order to protect users. Similarly, in March 2023, the company swapped out the holdings in its BUSD stablecoin. The move comes after Paxos, after the minting of the coin was halted in February by Paxos, the issuer of BUSD, due to regulatory concerns .
This announcement is also coming when the global crypto community is highly anticipating the Bitcoin halving event in a few hours. Stabilizing the fund also aligns with efforts to tackle turbulent price action and market fluctuations with the looming Bitcoin halving.
SAFU funds are now visible at the following USDC address: 0x4B16c5dE96EB2117bBE5fd171E4d203624B014aa and the value of the fund can be tracked in real time using the publicly available blockchain address.
A fun fact about the history of SAFU is that in 2018, Bizonacci, a popular content creator, posted a YouTube video with the title “Funds Are Safu." This quickly spread and became a viral meme amongst the crypto community, and users began using the phrase "Funds are SAFU."
Changpeng Zhao (CZ), former Binance CEO, also tweeted during an unscheduled maintenance that "funds are safe," and this phrase later became regularly used by CZ to create awareness for users that their funds were safe.
USDC is the second largest stablecoin, with a market share of around 20%, and it is good to know Binance has chosen this token to protect its users in extreme situations, such as exchange hacks and possible reimbursement for unforeseen losses.
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