During the cryptocurrency market’s current volatility, leading exchange Binance Holdings Ltd made an important announcement regarding its Secure Asset Fund for Users (SAFU). With Bitcoin‘s halving approaching in 2024, Binance revealed that their emergency insurance funds have now been changed to USDC, a stablecoin backed by the US dollar and issued by Circle Internet Financial.
Today, we’re moving all of SAFU’s assets to USDC. By choosing a reliable, audited, and transparent stablecoin like USDC for SAFU, we’re increasing its trustworthiness and keeping its value steady at $1 billion. (SAFU refers to Secure Asset Fund for Users, which is a user protection fund by Binance.)
Based on cryptocurrency transaction records, Binance exchanged approximately 16,277 Bitcoins in multiple transactions and over 1.36 million BNB tokens for US Dollar Coin (USDC). This conversion has raised the limit of Binance’s secure asset funds to $1 billion.
Founded in 2018 while Changpeng Zhao served as CEO, Binance’s Security Fund (SAFU) has made the cryptocurrency exchange stand out among its competitors. With over 187 million registered users worldwide, it’s crucial to ensure their safety from potential dangers, particularly cyber attacks.
Why Binance Opted for Circle’s USDC
In the last year, there have been strict regulations imposed on the cryptocurrency market due to the failure of Terra Luna UST and FTX exchange. Consequently, Binance Exchange had to pay a penalty of $4.3 billion for breaching US financial rules regarding fraud and money laundering.
Due to this, Binance has been conducting all its business in a transparent and legal manner to foster future opportunities for expansion. Additionally, institutional investors are actively looking for trusted and regulated web3 companies as they prepare to invest during the reported cryptocurrency market upswing.
Significantly, Circle’s USDC is the second largest stablecoin in terms of market capitalization following the fall of Binance BUSD. According to this update, Circle’s USDC has an estimated fully diluted valuation (FDV) of approximately $32.7 billion and a daily trading volume of around $9.1 billion.
Top institutions like BNY Mellon, MoneyGram, Visa (NYSE: V), Robinhood Markets (NASDAQ: HOOD), BlackRock (NYSE: BLK), and Mastercard (NYSE: MA), among others, utilize USDC as it is a stablecoin that is fully backed by the US dollar.
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.
Additionally, the price of BNB has fallen approximately 10% over the last week and was priced around $541 on Thursday. Likewise, Bitcoin’s price has decreased by over 14% in the same time frame and was trading at roughly $60,987 when this report was written. However, Binance remains a dominant player in the cryptocurrency market due to its robust user protection features that are not found in other exchanges.
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2024-04-18 12:07