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Binance converts its billion-dollar ‘Safu’ emergency fund into stablecoin USDC
The world’s largest crypto exchange Binance has converted the entire pool of assets held in an emergency fund for users into USDC, the stablecoin issued by US firm Circle Internet Financial.
The Secure Asset Fund for Users (Safu) was established in 2018 to serve as a backstop for customers in “extreme situations”, according to the exchange. Binance said in an announcement on Thursday that it would be “transferring 100% of Safu’s assets to USDC.”
Binance previously held funds in wallets comprising TUSD, BNB, Bitcoin, and Tether’s USDT, according to a Binance Academy post.
The move to USDC, a stablecoin that aims to maintain a price level with the US dollar, is the latest strategic shift under chief executive officer Richard Teng over the last five months.
Teng took the reins at Binance from Changpeng “CZ” Zhao, in the wake of a November 2023 plea deal with US agencies that led to a giant US$4.3 billion fine. He has since overseen the spinning off of Binance’s venture capital unit and a tightening of requirements for new token listings on the platform.
The Safu fund is generally maintained at around US$1 billion, but has fluctuated in the past, in tandem with market movements, Binance said in its announcement.
“Making use of a trusted, audited and transparent stablecoin for Safu, further enhances its reliability and ensures it remains stable at US$1B,” Binance said, adding that the value of the fund can be tracked in real time, using a publicly available blockchain address.
Chris Holland, partner at HM, a Singapore-based compliance consultancy firm, said the “100% USDC composition gives certainty to the value of the fund in US dollar terms”.
- Bloomberg
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