Reacting to the sudden collapse of the most crypto-friendly US banks, Binance CEO and co-founder Changpeng (CZ) Zhao reconsidered the firm’s recovery funds, aiming to change them into native crypto
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In a March 13 tweet, Binance CEO and co-founder Changpeng (CZ) Zhao responded to the ongoing crypto investors’ concern with an announcement that the exchange will be converting the remaining $1 billion funds in its Industry Recovery Initiative from BUSD into “native crypto.”
Collapses of the three major crypto-lenders, Silicon Valley Bank (SVB), Silvergate Bank and Signature Bank caused the stablecoin USDC to fall to as low as $0.87 from its $1 benchmark.
The decline happened as Circle, the company behind USDC, disclosed it had around $3.3 billion held at the failing SVB. That added to the stablecoin’s public trust issue, as Circle is also known to own an undisclosed amount of assets in now-bankrupt Silvergate.
Although the USD-pegged token further recovered to $0.99, public concern around stablecoins continued to mount.
Therefore, Binance executives decided on strategic changes to its “Industry Recovery Initiative” program, which enables Web3 ecosystem participants to access funding opportunities while facing significant short-term difficulties.
“Native crypto” that will be used for conversion of the remaining $1 billion fund will include BTC, Binance Coin (BNB) and ETH. Some fund movements will occur on-chain for further transparency.
CZ also posted links to the transaction hash IDs for the BTC and the ETC, stating that the conversion of $980 million took 15 seconds and incurred a $1.98 transaction fee.
The crypto community’s response to the news was mixed, as part of the public suggested moving funds to inherently volatile crypto assets was not a viable solution. At the same time, many users felt reassured and praised the Binance initiative.
