Binance shifts billion-dollar emergency fund to USDC

Onwubuke Melvin
Onwubuke Melvin

Binance has undergone a shift by converting its entire pool of assets held in the Secure Asset Fund for Users into USDC, the stablecoin issued by US firm Circle Internet Financial.

In the past, Binance has held TUSD, BNB, Bitcoin, and Tethers USDT funds in its wallet, according to Bloomberg.

SAFU was set up in 2018 to protect customers in extreme situations, but now Binance has decided to transfer 100% of SAFU assets to USDC, marking a significant shift, Bloomberg first reported.

However, the move to USDC is the latest strategic drive under the leadership of Chief Executive Officer Richard Teng, who took over the role following a plea bargain with US agencies that resulted in a record $4.3 billion fine in November 2023.

Binance has seen the spin-off of its venture capital unit and the tightening of the requirements for new token sales on the platform under the leadership of Tengs.

The decision to shift the SAFU fund into USDC aligns with this strategic realignment, aiming to enhance reliability and stability amid market uncertainties.

In response to market movements, SAFU, which is typically maintained at around $1 billion, has experienced fluctuations in the past. Binance aims to provide certainty and stability for the fund, which will ensure that it maintains its $1 billion value with USDC, a coin intended to reflect US dollar values.

In addition, the overall reliability of the Fund is enhanced by USDC’s transparent and auditable nature.

Chris Holland, a partner at HM, a Singapore-based compliance consultancy firm, emphasized the significance of the shift, stating that the “100% USDC composition gives certainty to the value of the fund in US dollar terms.”

Binance’s decision to convert SAFU assets into USDC represents a strategic decision aimed at enhancing the reliability and stability of user funds in the face of the ever-changing crypto market landscape.

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