Binance moved its SAFU funds from Bitcoin and its native coin BNB to Circle’s USDC to ensure stability and reliability.
Amid the ongoing heightened cryptocurrency volatility ahead of Bitcoin halving 2024, the leading crypto exchange by daily traded volume and registered users Binance Holdings Ltd announced major changes to its Secure Asset Fund for Users alias SAFU.
According to the announcement, Binance’s emergency insurance funds have fully been converted to USDC, a US dollar-backed stablecoin issued by Circle Internet Financial.
“Today, we are transferring 100 percent of SAFU’s assets to USDC. Making use of a trusted, audited, and transparent stablecoin for SAFU further enhances its reliability and ensures it remains stable at $1 billion,” Binance noted.
According to on-chain data, Binance converted a total of 16,277 Bitcoins in several batches and 1.36 million BNB coins to USDC. As a result, Binance SAFU wallets are now capped at $1 billion.
Established in 2018 during the tenure of Changpeng Zhao as the CEO, the Binance SAFU has set the cryptocurrency exchange apart from other exchanges.
Furthermore, the Binance exchange has more than 187 million registered global users, who need protection against existential threats, especially from hackers.
See Also: Binance Converted $1 Billion SAFU Fund To USDC
Why Binance Opted for Circle’s USDC
The cryptocurrency market has heavily been regulated in the past year following the collapse of Terra Luna UST and FTX exchange.
Already, Binance Exchange was forced to part with $4.3 billion as a fine for violating U.S. financial regulations on fraud and money laundering.
As a result, Binance has been doing all its operations by the books to ensure further growth prospects.
Moreover, institutional investors are seeking secure and regulated web3 firms to operate with during the confirmed crypto bull run.
Notably, Circle’s USDC has achieved the second-largest stablecoin by market cap after the collapse of the Binance BUSD.
As of this report, Circle’s USDC had a fully diluted valuation (FDV) of about $32.7 billion and a daily average trading volume of around $9.1 billion.
As a fully US dollar-backed stablecoin, USDC is used by top institutions such as BNY Mellon, MoneyGram, Visa Inc (NYSE: V), Robinhood Markets Inc (NASDAQ: HOOD), BlackRock Inc (NYSE: BLK), and Mastercard Inc (NYSE: MA), among others.
Market Impact
The transition of Binance’s SAFU from Bitcoin and BNB to USDC is a clear indication the cryptocurrency market is highly liquid for all investors.
With less than four days to the fourth Bitcoin halving, the BNB and BTC sales by Binance weighed heavily on short-term buyers.
Moreover, BNB price has been dropping about 10 percent in the past seven days to trade around $541 on Thursday.
Similarly, Bitcoin price has slipped more than 14 percent in the past week to trade around $60,987 at the time of this report.
Nonetheless, Binance will continue to reign in the crypto market due to its user protection measures, which are not available in other exchanges.
Disclaimer: The information provided is not trading advice. Bitcoinworld.co.in holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.
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Disclaimer: The information provided is not trading advice, Bitcoinworld.co.in holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.