Terra Do Kwon, founder of Terraform Labs (TFL) and Ethereum competitor, has recently made announcement about his plans to obtain $10 billion worth of Bitcoin (BTC) for reserves. He stressed that once TFL’s stablecoin TerraUSD is backed by this $10B BTC in reserves, it will “open a new monetary era of the Bitcoin standard.”
As a decentralized blockchain platform, Terra specializes in stablecoin minting. The Terra blockchain is currently using two tokens: native token Terra (Luna) and UST token (Terra USD), a stablecoin pegged to the US dollar.
Specific details are sparse at this stage, however. Kwon noted via Twitter on Monday that Terra will not sell its native asset LUNA to build its reserves and that more information is coming soon.
However, at this point, no further details have been revealed about this deal. On Monday, Kwon announced on Twitter that Terra will not sell its native token Luna to build the reserves. More specific information is coming soon.
“P2P electronic cash that is easier to spend and more attractive to hold,” he stated.
When asked about the purpose of the BTC reserves, Kwon claimed that all the money will be used to backstop short-term redemptions of TerraUSD as well as for a decentralized foreign exchange reserve.
This is not the first time Terra co-founder shares about his plans to use the reserves to back Terra’s stablecoin. Last week, Kwon announced that Terraform Labs (TFL) had donated 12 million to the Luna Foundation Guard LFG (which is worth approximately $1 billion at current prices). The donation, according to Kwon, will be used to support the development of the Terra ecosystem as well as ensure the stablecoins’ sustainability. “We will keep growing reserves until it becomes mathematically impossible for idiots to claim depeg risk for UST.”, he tweeted.
Data from Coingecko shows that the market cap of UST is currently $15.12 billion.
