Binance, the world’s largest crypto exchange, has undergone a shift by converting its entire pool of assets held in the Secure Asset Fund for Users (SAFU) into USDC, the stablecoin issued by US firm Circle Internet Financial.
Established in 2018, SAFU served as a backstop for customers in extreme situations, but now, Binance has decided to transfer 100% of SAFU’s assets to USDC, marking a notable transition, Bloomberg first reported.
Previously, Binance maintained funds in wallets containing TUSD, BNB, Bitcoin, and Tether’s USDT. However, the move to USDC represents the latest strategic maneuver under the leadership of Chief Executive Officer Richard Teng, who assumed the role following a plea deal with US agencies that resulted in a hefty $4.3 billion fine in November 2023.
Under Teng’s leadership, Binance has witnessed the spinning off of its venture capital unit and a tightening of requirements for new token listings on the platform. The decision to shift the SAFU fund into USDC aligns with this strategic realignment, aiming to enhance reliability and stability amid market uncertainties.
The SAFU fund, typically maintained around $1 billion, has experienced fluctuations in the past in response to market movements. By leveraging USDC, a stablecoin designed to mirror the value of the US dollar, Binance aims to provide certainty and stability to the fund, ensuring it remains stable at $1 billion. Moreover, the transparency and auditability of USDC contribute to enhancing the fund’s overall reliability.
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 conversion of its SAFU assets into USDC represents a strategic decision aimed at enhancing reliability and stability in safeguarding user funds amid the ever-changing landscape of the cryptocurrency market.