Binance’s $1B emergency ‘SAFU’ fund will hold 3% of the UDSC supply
The world's largest crypto exchange, Binance, is converting its Secure Asset Fund for Users (SAFU) to Circle's USD Coin (USDC) stablecoin, which now accounts for 3% of its circulating supply.
The company announced the move on April 18, saying, “We will transfer 100% of SAFU's assets to USDC,” but did not explain why, but added that “a trusted, audited and transparent stable coin is being used for SAFU.” ” This further increases its reliability and ensures stability at $1 billion.
The exchange's safe asset fund for users is an emergency insurance fund established in 2018 to protect Binance users in critical situations, such as an exchange hack, where users are compensated for unexpected losses.
According to Etherscan, the SAFU wallet address transacted 800 million USDC in Ethereum at 2:35 am UTC with a transaction fee of just $1.88.
A transfer of 1.36 million BNB and 16,277 BTC worth around $754 million was transferred as a conversion process.
The billion-dollar Binance Insurance Fund now represents 3 percent of Circle's stablecoin supply of $32.6 billion.
It is the second fund change in over a year. In March 2023, Binance announced the replacement of Binance USD (BUSD) holdings in SAFU with Tether (USDT) and TrueUSD (TUSD).
The move at the time was in response to regulatory action against BUSD issuer Paxos, which announced it would stop creating the exchange-backed stablecoin.
Related: Crypto exchange insurance fund raises more than $1B amid bull market
Tether remains the world's leading stablecoin, with a record supply of $108 billion, giving it a 69% market share, according to CoinGecko.
Circle's USDC is the second largest stablecoin with a market share of around 20%, with supply increasing by 33% as of December 2023.
Related: ‘China to start auction' — Will Hong Kong's Bitcoin ETFs fuel the halving rally?
