The world’s largest cryptocurrency exchange, Binance, has converted its Secure Asset Fund for Users (SAFU) into Circle’s USD Coin (USDC), a stablecoin pegged to $1.00, now constituting 3% of its circulating supply.
Binance announced this move on April 18, citing the transition to USDC as a means to enhance SAFU’s reliability and stability. However, specific reasons behind the decision were not disclosed beyond the aim to utilize a trusted, audited, and transparent stablecoin.
Established in 2018, SAFU serves as an emergency insurance fund to safeguard Binance users during extreme circumstances like exchange hacks, offering potential reimbursement for unexpected losses.
According to Etherscan data, the SAFU wallet recently executed a transaction involving 800 million USDC on the Ethereum network, incurring a negligible transaction fee. Additionally, there were transfers of 1.36 million Binance Coin (BNB) and 16,277 Bitcoin (BTC) as part of the conversion process.
With its assets now primarily in USDC, the billion-dollar Binance insurance fund represents approximately 3% of Circle’s stablecoin’s $32.6 billion supply. This marks the second conversion of the fund within a year.
In March 2023, Binance had replaced Binance USD (BUSD) holdings in SAFU with Tether (USDT) and TrueUSD (TUSD) amid a regulatory crackdown on BUSD issuer Paxos, which ceased minting the stablecoin. Tether remains the dominant stablecoin globally, with a circulating supply surpassing $108 billion, comprising 69% of the market share.
Circle’s USDC ranks as the second-largest stablecoin, accounting for approximately 20% of the market share. Its supply has expanded by 33% since December 2023, consolidating its position in the stablecoin market.
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