Major crypto exchange Binance has converted the whole of its Secure Asset Fund (SAFU) to the USDC, the second largest stablecoin by market cap after Tether.

SAFU is an emergency insurance reserve created as a backstop for investors who use Binance. The fund is used to pay back traders in the case that the exchange loses investor assets (i.e. as the result of a hack).

Typically, the fund aims to always have a value over $1 billion. Prior to the conversion it held both BTC and BNB, which, over the past seven days, are both down 12.6% and 9.1% respectively according to CoinGecko. In turn, the crypto exchange decided to convert its entire balance to USDC to bolster “reliability and stability.”

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“SAFU is an emergency insurance fund that was established in 2018 to protect Binance users in extreme situations,” Binance said in a blog post. “Over the years, we’ve continued to monitor SAFU’s size, maintaining the balance at a level adequate to safeguard our users.”

Approximately, $1 billion of BTC left the SAFU Bitcoin wallet and just over $740 million of BNB left its Binance wallet. Using block explorers shows that both sums ended up in Binance hot wallet addresses. Now, it appears all that remains is $1 billion in the SAFU Ethereum address.

"Over the years, we’ve continued to monitor SAFU’s size, maintaining the balance at a level adequate to safeguard our users," a Binance spokesperson told Decrypt. "Although it has fluctuated, this level is typically set at $1B."

Crypto Twitter onlookers have speculated the move more about Binance taking profits than because the fund is in poor health. Even though Bitcoin recently took a dive, it’s still much higher than it was at the start of the year.Moving assets into a stablecoin is a common strategy to improve stability in a fund, as stablecoins aim to keep the value of a fiat currency. However, it’s notable that Binance chose Circle’s USDC over Tether’s USDT—which is currently the largest stablecoin by over $76 million of market cap.

In the blog post, Binance justified this decision by emphasizing that USDC is a “trusted, audited, and transparent stablecoin.” Tether has a long history of controversy with critics claiming the stablecoin isn’t actually backed by real U.S. dollars—which many believe is why it has, on occasion, lost its dollar peg.

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<em>Edited by <a href="https://decrypt.co/author/stacy"&gt;Stacy Elliott</a>.</em>

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