Binance, a dominant player in the cryptocurrency industry, has switched its $1 billion safety fund to USDC, a strategic move that might lead to more openness and a return to the Indian market.
In an effort to gain user trust and conform to regulatory requirements, Binance, the biggest cryptocurrency exchange in the world, said on Thursday that it would convert its US$1 billion Secure Asset Fund for Users (SAFU) to USDC stablecoin.
About three percent of the USDC in circulation is attributable to the SAFU conversion. “We are transferring all of SAFU’s assets to USDC today. Binance said that using a stablecoin for SAFU that is trustworthy, audited, and transparent will further increase its trustworthiness and guarantee that it stays stable at $1B.”
At the same time, Binance is reportedly reorganizing its operations to conform with the country’s legislation as part of its continuing discussions to return to the Indian market, as reported Thursday by The Economic Times.
After settling a $2 million fine and getting in line with the country’s Financial Intelligence Unit (FIU) regulations—including the Prevention of Money Laundering Act (PMLA) and the crypto taxation framework—Binance is planning to return to India.
Binance was a major player in India’s cryptocurrency scene before its interim suspension for non-compliance, with Indian investors reportedly owning some US$3.6 billion in crypto assets on the site (Economic Times, 2019).
An important step forward for Binance in Dubai was getting a complete Virtual Asset Service Provider (VASP) license, which opens the door for the business to serve a wider range of customers, including individual investors.
In order to comply with regulations, Binance co-founder Changpeng Zhao has made significant concessions in governance, including giving up ownership of Binance FZE, an organization domiciled in Dubai.