Safety is in the eyes of the beholder. It is made of cellulose, wood fiber, but needs to be treated with various nasty chemicals to manufacture it. It is washed, and cleaned, thoroughly, allegedly, before it is finished. There is also a medical grade CC, rayon, that may be, technically, even safer. Jeremy can answer this in great detail, but I feel more comfortable with CC versus silica or fiberglass.
To be precise: Lyocell or Tencel (CC is a form of Lyocell or Tencel), the latest version of rayon, is not processed using "nasty chemicals". In fact, the chemical used as solvent to create the wood pulp is actually safe enough, so that you could dip your hand in it for a short period of time with no harmful effects. And it is eco-friendly, and recycled for other purposes after being used to create the rayon. The lack of nasty chemicals in the manufacturing process is one of the many benefits, and the reason this version of rayon can be processed into medical grade products.
It is also used in the filters of analogs since the 1990s, although that's probably not exactly a selling point for our crowd!