The founder of Terraform Labs (TFL) and Ethereum rival Terra (LUNA) Do Kwon has laid out plans to accumulate a whopping $10 billion worth of Bitcoin (BTC) to replenish the project’s stablecoin reserves.
Terra is a decentralized blockchain platform specialized in stablecoin mining. Its Terra USD (UST) is an algorithmic stablecoin pegged to the value of the US dollar, with the US dollar value partially backed by the equivalent amount of LUNA’s native token.
Specific details are scarce at this stage, however, Kwon noted on Twitter on March 14 that Terra will not be selling its own LUNA asset to build its reserves, and that more information will be coming soon.
Kwon also optimistically emphasized that his stablecoin TerraUSD (UST), backed by over $10 billion in BTC reserves, “will usher in a new monetary era of the Bitcoin standard.”
“P2P electronic money that is easier to spend and more convenient to store,” he added.
$UST with more than $10 billion in $BTC reserves will usher in a new monetary era of the Bitcoin standard. P2P e-money that is easier to spend and more attractive to store #btc — Do Kwon (@stablekwon) March 14, 2022
Cointelegraph reached out to Kwon to see if the plans had already been put into action, or if it was just an idea put forward at this stage, and the founder simply responded:
“I don’t understand the difference, we are already buying Bitcoin.”
When asked by Twitter users what the BTC reserves would be used for, he replied that the funds would be used to support short-term UST redemptions and for a decentralized foreign exchange reserve.
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For the second time this month, Kwon laid out plans to strengthen the reserves backing the Terra stablecoin.
After TFL donated 12 million LUNA to LFG’s Luna Foundation Guard on Friday (worth about $1 billion at current prices) to support the growth of the Terra ecosystem and the sustainability of its stablecoins, Kwon emphasized that the project will continue to “grow reserves until then.” until it becomes mathematically impossible for idiots to claim UST risk reduction.”
According to Coingecko, UST currently has a market capitalization of $15.12 billion.