A $1B Bitcoin Swap: Support for the Industry or Just a Trade?
Today, Binance announced that it will change the structure of its SAFU (Secure Asset Fund for Users) by gradually converting stablecoins into Bitcoin. The process will take 30 days, and the total amount to be converted is $1 billion. The stated goal is to support the industry amid uncertainty.
What I find interesting is this: which industry exactly is being supported when someone exchanges a large amount of stablecoins for Bitcoin?
At rabbit.io, exchanges like this happen regularly. Not for a billion dollars, of course, but sometimes for fairly large amounts. When someone gives up stablecoins in these trades, are they also "supporting an industry"? And what about the other side of the trade - the one that gives up Bitcoin and receives stablecoins? Are they supporting someone too?
Probably, such exchanges support the crypto exchange industry itself. Maybe that is what Binance meant.
In reality, swapping stablecoins for Bitcoin is a pretty routine operation today.
- Binance has stablecoins, someone else has Bitcoin.
- They make a trade.
- Binance ends up with Bitcoin, the counterparty ends up with stablecoins.
- On a global level, nothing really changes.
So there is no reason to overestimate the importance of this event for the industry. It might simply be that Binance decided to take advantage of a favorable exchange rate and exit a less promising asset - tokenized dollars. Why not? Sounds like a smart move to me.
