Binance Transitions Its Secure Asset Fund into USD Coin, Accounting for 3% of Stablecoin Supply
Summary:
Binance, the world's largest crypto exchange, is transferring its Secure Asset Fund for Users (SAFU) into USD Coin (USDC) and now this transition accounts for 3% of USDC's current supply. The SAFU, an emergency insurance fund developed in 2018, is designed to compensate users in events like exchange breaches. The recent conversion process also consisted of major BNB and BTC transfers. This change is the second for the fund in slightly more than a year, with the previous one being a switch from Binance USD (BUSD) to Tether (USDT) and TrueUSD (TUSD) back in March 2023.
Binance, the globe's biggest cryptocurrency exchange, has decided to switch its Secure Asset Fund for Users (SAFU) into Circle's USD Coin (USDC), a prominent stablecoin. This action now accounts for 3% of USDC's circulating supply. Binance made the announcement on April 18, revealing that they're shifting 100% of SAFU's assets into USDC. The motive behind the move was left unexplained, beyond the claim of using a "trusted, audited, and transparent stablecoin for SAFU" to enhance its dependability and maintain stability at $1 billion.
Established in 2018, the Secure Asset Fund for Users is designed as a safety net to safeguard Binance users during extreme events like exchange hacks. The purpose of SAFU is to provide potential reimbursement for unexpected losses.
As per Etherscan data, the SAFU wallet executed an 800 million USDC transaction on Ethereum at 02:35 UTC, costing a negligible transaction fee of $1.88. The conversion process also included a 1.36 million BNB transfer approximately valued at $754 million and a 16,277 BTC transfer. Circle's stablecoin now holds about 3% of the $1 billion Binance insurance fund, which equates to $32.6 billion in total supply.
This movement marks the second conversion of the fund in just over a year. In March 2023, Binance declared replacing the Binance USD (BUSD) assets in the SAFU with Tether (USDT) and TrueUSD (TUSD) in response to regulatory actions against Paxos, the issuer of BUSD, who stated they would cease issuance of the Binance-backed stablecoin.
Currently, Tether is still the leading stablecoin worldwide, reaching a record circulation of $108 billion, earning it a 69% market share according to CoinGecko. Circle's USDC trails behind as the second largest stablecoin with around 20% market share, considering its supply has grown by 33% since December.
Published At
4/18/2024 8:50:09 AM
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