Binance News: Back on January 29, 2022, Binance unveiled the “Secure Asset Fund for Users (SAFU), which is an emergency insurance fund valued at $1 billion to safeguard its users from any catastrophic event. The SAFU fund wallets were initially stocked with BNB, BUSD, and BTC. However, in light of Paxos being asked to stop minting new BUSD by the New York state regulators, Binance has swapped out BUSD assets in the fund for two major stablecoins competing in the market.
Binance Replaces BUSD With Rivals
The Binance exchange has chosen TrueUSD (TUSD) and Tether (USDT) as their preferred option for replacing BUSD. With the BUSD market value steadily declining over time, this swap will make sure that assets in SAFU continue to safeguard users over the long term. With the BUSD market value steadily declining over time, this swap will make sure that assets in SAFU continue to safeguard users over the long term.
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According to the official announcement, this modification will have no effect on users, and these funds will remain on publicly verifiable addresses. The report further stated that the SAFU fund is being continuously monitored to ensure that it’s adequately capitalized, and topped up periodically, as needed — using Binance’s own funds. However, the leading crypto exchange explicitly mentioned that they would continue to support the BUSD currency pair.
As Paxos will no longer be minting new BUSD, #Binance has swapped the BUSD in the SAFU Fund for TUSD & USDT.
This change will have no impact on users, and the funds remain on publicly verifiable addresses.
Funds are SAFU.https://t.co/edLVgpdCUQ
— Binance (@binance) March 17, 2023
Is BUSD Dieing A Slow Death?
This comes as a major blow to BUSD holders and to Binance as it shows the lack of trust in the stablecoin going forward. The troubled stablecoin has been rapidly losing market dominance as its market cap continues to plunge, decreasing from $15.5 billion recorded in January of 2023 to its current value of $8.2 billion.
BUSD temporarily depegged and sank into a discount of 0.9950 after the news broke that NYDFS had ordered Paxos to halt minting additional stablecoins. Since then, the price of BUSD has recovered from its previous losses, and in light of the latest news regarding Binance, BUSD BUSD has remained stable around its $1 peg at the time of writing.
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Pratik has been a crypto evangelist since 2016 & been through almost all that crypto has to offer. Be it the ICO boom, bear markets of 2018, Bitcoin halving to till now – he has seen it all.
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
This article has been originally published at: https://coingape.com/binance-news-ditches-busd-for-safu-fund/