Binance announced that it has begun the process of converting its $1 billion Secure Asset Fund for Users (SAFU) from stablecoins to Bitcoin, a process expected to be completed within 30 days. The change addresses a number of criticisms from the industry and will serve to strengthen user protection.
According to Binance’s announcement, the exchange will maintain the fund with a target of $1 billion, with a minimum of $800 million, committing to replenish the reserve if market movements push it below that threshold. This means the company is addressing the criticism it has received and improving the protection of its users with a sufficient reserve fund.
The company stated that the reallocation will be implemented gradually to limit market interference in the process and that the replenishment mechanism is intended to provide buying support during price dips.
What effects does this have on Binance?
Industry reports indicate that the conversion removes $1 billion of liquidity from stablecoins and allocates it to direct BTC purchases, a dynamic that could add sustained buying pressure to the market. Observers also note parallel moves by other major players, including the increased allocation to Bitcoin reported by Tron founder Justin Sun, which could amplify demand.
Critics warn that linking the insurance fund to Bitcoin increases concentration risk, as a BTC-backed SAFU could suffer steeper declines in a market sell-off, potentially reducing its protective value when users need it most. This underscores the importance of Binance’s commitment to respecting the $800 million threshold.
Proponents counter that the replenishment pledge establishes a demand floor and signals institutional confidence in Bitcoin as a reserve asset.
For market participants, the immediate implication is twofold: the conversion could support Bitcoin prices by creating sustained buying pressure, and it shifts counterparty risk from stablecoins to BTC volatility.
The key verifiable outcome to watch is whether Binance should make replenishment purchases if the fund falls below $800 million—an event that would demonstrate how the new structure behaves under stress and which market observers will be closely monitoring in the coming weeks.
