Binance has announced that it is converting its Secure Asset Fund for Users (SAFU) into Circle’s USD Coin (USDC).
Following the $1B conversion into USDC, this stash now makes up approximately 3% of Circle’s total circulating supply, which is $32.6 billion.
In an April 18 announcement by Binance, the exchange emphasized the importance of SAFU in its ecosystem.
Binance stated, “SAFU continues to be a core part of our responsibility to the ecosystem, and we continue to evolve to meet market conditions head-on. Today, we are transferring 100% of SAFU’s assets to USDC.”
Binance aims to improve its reliability and maintain stability at $1 billion by using a trusted, audited, and transparent stablecoin for SAFU.
SAFU, created in 2018, functions as an emergency insurance reserve that protects Binance users from severe scenarios like exchange breaches, providing a safety net for potential losses.
Over the years, Binance has diligently monitored the size of the fund, ensuring that it maintains a balance sufficient to protect its users. While usually targeted at $1 billion, the fund’s size undergoes occasional fluctuations.
According to Etherscan data, the SAFU wallet address conducted a transaction of 800 million USDC on the Ethereum network at 02:35 UTC, incurring a transaction fee of $1.88. The conversion process also involved the transfer of 1.36 million BNB valued at approximately $754 million and a transfer of 16,277 BTC.
The Binance insurance fund, converted into USDC, is now equal to approximately 3% of Circle’s stablecoin’s total circulating supply, amounting to $32.6 billion.
This marks the fund’s second conversion within just over a year. In March 2023, Binance announced a previous conversion, replacing Binance USD (BUSD) holdings with Tether and TrueUSD (TUSD).
This decision was made to protect users due to regulatory pressures following a crackdown on BUSD issuer Paxos, which announced it was stopping minting the exchange-backed stablecoin.
According to CoinGecko data, Tether maintains its position as the leading stablecoin globally, with a circulating supply of $109 billion and a market share of 69%.
Meanwhile, Circle’s USDC stands as the second largest stablecoin, accounting for approximately 20% of the market share. USDC’s supply has surged by 33% since December, solidifying its position in the stablecoin market.