Binance exchange intends to swap roughly $1 billion in stablecoins for Bitcoin from its Secure Asset Fund for Users, or SAFU. In an open letter to the cryptocurrency community, the exchange announced that the conversion would occur gradually over the next 30 days.
Binance’s emergency insurance pool, SAFU, is funded by trading fees and designed to compensate users for losses in dire circumstances. Prior to this, the fund mostly held dollar-pegged stablecoins; in 2024, it switched from Bitcoin and Bitcoin-Nexus to USDC.
How the SAFU Conversion Will Work
After the change is complete, all of SAFU’s backing will come from Bitcoin rather than stablecoins. Binance describes Bitcoin as the “foundational asset” of the cryptocurrency ecosystem and says the move reflects its long-term assessment of BTC’s endurance and strength.
The corporation wants to keep SAFU’s value at around $1 billion, despite Bitcoin’s price swings. The release states that Binance will monitor the fund’s market value and replenish it if significant declines in Bitcoin drive it below a specified threshold.
If the fund falls below $800 million, Binance says it will inject more Bitcoin to bring SAFU back to 1 billion. This rule aims to protect the insurance pool’s buying power, even during deep market downturns.
What This Means for Traders and the Market
For regular users, SAFU’s purpose remains the same: a backstop in the event of security breaches or other severe incidents. However, if you are concerned about risk, it is important to note that the fund will now move with Bitcoin’s price rather than remain pegged to the dollar.
The gradual conversion could add steady buy pressure to BTC markets over the next month, though Binance aims to limit disruption by spreading out trades.
The shift also reverses the 2024 decision to fully park SAFU in USDC, indicating Binance’s renewed preference for holding user protection reserves in Bitcoin rather than stablecoins.
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