Binance to Hold SAFU Emergency Fund Entirely in Bitcoin

• In 2018, SAFU got rolled out as an emergency insurance fund intended to safeguard users in cases like hacks or unpredictable platform losses
• Till now, the fund has been maintained by mixing stablecoins and prominent crypto assets. 

The largest crypto exchange, Binance, unveils that its Secure Asset Fund for Users will be changed into Bitcoin, indicating a shift in how the exchange protects its emergency protection fund at the time of continued market volatility. 

The plan got revealed in an open letter shared on the social media platform X on Thursday. Binance has also confirmed that the conversion will occur within one month, after which the SAFU fund will be completely held in BTC instead of dollar-pegged assets. 

The SAFU fund will be realigned as per the market value. If the price movements of Bitcoin lead the fund to go down beyond $800 million, the exchange revealed that it will top it back up to $1 billion.  

Binance said that Bitcoin is the basic asset of the crypto ecosystem, and revealed holding SAFU in BTC shows a long-term view instead of a short-term response to price volatility. 

Why is SAFU Important? 

In 2018, SAFU got rolled out as an emergency insurance fund intended to safeguard users in cases like hacks or unpredictable platform losses. Till now, the fund has been maintained by mixing stablecoins and prominent crypto assets. 

The publicisation follows the decision of Binance to continue to scale its global operations. The exchange mentioned it attained 300 million users last year and generated $34 trillion in trading volume over the year.  

Binance also listed proof-of-reserves equalling $162.8 billion over 45 crypto assets. The founder of Binance, Changpeng Zhao, also believes that Bitcoin could witness a supercycle this year, possibly going past the traditional four-year halving cycle as adoption broadens and policy attitudes develop. 

The founder has also highlighted that the exchange is in talks with the governments on the subject of asset tokenisation and more. Talking about regulations, Binance has recently applied for an EU MiCA licence in Greece, which would permit unified operations over the bloc. 

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