Binance Converts User Emergency Fund Assets into USDC for Enhanced Stability

cryptonews.com:

Binance  has made a significant strategic move by converting the entire pool of assets held in its emergency fund for users into USDC (USD Coin), a stablecoin issued by Circle Internet Financial. 

The exchange’s Secure Asset Fund for Users (SAFU), established in 2018 as a safety net for customers during extreme situations, will now consist entirely of USDC, according to an announcement made by Binance.

Previously, the fund held a mixture of assets, including TUSD, BNB, Bitcoin, and Tether’s USDT, as  detailed in a Binance Academy post . 

The decision to shift to USDC reflects the latest shift in strategy under the leadership of CEO Richard Teng, who took over from Changpeng “CZ” Zhao following a plea deal with US agencies in November 2023 that resulted in a substantial $4.3 billion fine. 

Teng has since overseen the spin-off of Binance’s venture capital unit and implemented stricter requirements for token listings on the platform.

While the SAFU fund is typically maintained at approximately $1 billion, its value has fluctuated in response to market movements in the past. 

Binance’s announcement highlighted the advantages of using a trusted, audited, and transparent stablecoin like USDC, which aims to maintain a price level pegged to the US dollar. 

The conversion to USDC provides enhanced reliability and stability for the fund, ensuring it remains at the $1 billion mark. 

The value of the fund can be monitored in real time through a publicly available blockchain address, adding transparency to the process.

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

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