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Major crypto exchange Binance has converted the entire of their Secure Asset Fund (SAFU) towards the USDC, the second largest stablecoin by market cap after Tether.
SAFU is definitely an emergency insurance reserve produced like a backstop for investors using Binance. The fund can be used to repay traders within the situation the exchange loses investor assets (i.e. because of a hack).
Typically, the fund aims to continually possess a value over $1 billion. Before the conversion it held both BTC and BNB, which, in the last 7 days, are generally lower 12.6% and 9.1% correspondingly based on CoinGecko. Consequently, the crypto exchange made the decision to transform its entire good balance to USDC to boost “reliability and stability.”
“SAFU is definitely an emergency insurance fund which was established in 2018 to safeguard Binance users in extreme situations,” Binance stated in your blog publish. “Over time, we’ve ongoing to watch SAFU’s size, maintaining the total amount at an amount sufficient to guard our users.”
Roughly, $1 billion of BTC left the SAFU Bitcoin wallet and merely over $740 million of BNB left its Binance wallet. Using block explorers implies that both sums wound up in Binance hot wallet addresses. Now, it seems everything remains is $1 billion within the SAFU Ethereum address.
“Through the years, we’ve ongoing to watch SAFU’s size, maintaining the total amount at an amount sufficient to guard our users,” a Binance spokesperson told Decrypt. “Even though it has fluctuated, this level is usually set at $1B.”
Crypto Twitter onlookers have speculated the exercise about Binance taking profits than since the fund is ill. Despite the fact that Bitcoin lately required a dive, it’s still much greater of computer was at the beginning of the entire year.Moving assets right into a stablecoin is a very common technique to improve stability inside a fund, as stablecoins try to keep the need for a fiat currency. However, it’s notable that Binance chose Circle’s USDC over Tether’s USDT—which is presently the biggest stablecoin by over $76 million of market cap.
Within the blog publish, Binance justified this decision by emphasizing that USDC is really a “trusted, audited, and transparent stablecoin.” Tether includes a lengthy good reputation for debate with critics claiming the stablecoin isn’t really backed by real U.S. dollars—which many believe is the reason why it’s, occasionally, lost its dollar peg.
<em>Edited by <a href=”https://decrypt.co/author/stacy”&gtStacy Elliott</a>.</em>
