Binance, the world's leading exchange by trading volume, has announced the conversion of its Secure Asset Fund for Users (SAFU) fund into Circle's USDC stablecoin.
In an announcement, Binance praised Circle's USDT as an "audited" and "trusted" stablecoin.
The emergency fund was launched by Binance back in July in order to safeguard the exchange's users. Binance allocated a portion of trading fees to the fund.
Prior to the conversion, the fund's wallets included Binance's native BNB token, Bitcoin (BTC), Tether's USDT stablecoin, and the TrueUSD (TUSD) stablecoin. The size of the fund was typically set at $1 billion, but its value would routinely fluctuate since it included a basket of different cryptocurrencies.
Alex DovbnyaFor instance, when the cryptocurrency market experienced extreme volatility in November 2022 amid the FTX crisis, Binance rushed to top it up in order to protect users.
The conversion into USDC will ensure the stability of the SAFU fund even during market fluctuations since the USDC stablecoin is pegged to the US dollar. Moreover, it is often touted as a safer alternative to Tether's USDT due to its strong emphasis on regulatory compliance. Chris Holland, partner at compliance firm HM, told Bloomberg that the conversion gives "certainty" to the value of the fund.
According to CoinGecko data, USDC is the sixth-largest cryptocurrency with a market capitalization of $32.4 billion. Binance's BNB token has a market cap of $83.9 billion, which puts it in fourth place.
In March 2023, Binance also swapped out the holdings in its BUSD stablecoin after the minting of the token was halted by Paxos due to regulatory concerns.
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