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The founder of Terraform Labs (TFL) and Ethereum competitor Terra (LUNA) Do Kwon has outlined plans to accumulate a whopping $10 billion worth of Bitcoin (BTC) to add to the project’s stablecoin reserves.
Terra is a decentralized blockchain platform that specializes in stablecoin minting. Its Terra USD (UST) is an algorithmic stablecoin pegged to the value of the U.S. dollar, with the USD value partly maintained via an equivalent amount of its native token LUNA.
Specific details are sparse at this stage, however Kwon noted via Twitter on March 14 that Terra will not sell its native asset LUNA to build its reserves, and that more information is coming soon.
Kwon also bullishly emphasized that its stablecoin TerraUSD (UST) backed by $10 billion plus in BTC reserves will “open a new monetary era of the Bitcoin standard.”
“P2P electronic cash that is easier to spend and more attractive to hold” he added.
$UST with $10B+ in $BTC reserves will open a new monetary era of the Bitcoin standard.
P2P electronic cash that is easier to spend and more attractive to hold #btc
— Do Kwon (@stablekwon) March 14, 2022
Cointelegraph reached out to Kwon to see if the plans were already in motion, or it was just an idea being floated at this stage, and the founder simply responded:
“I don’t understand the distinction, We’re already buying Bitcoin.”
When users on Twitter asked Kwon what the BTC reserves will be used for, he responded that the funds will be used to backstop short-term UST redemptions and for a decentralized forex reserve.
In a tweet shortly after, Kwon also noted that: “We start buying BTC and Twitter verifies me, I see you Jack,” in a nod to Jack Dorsey, who is a Bitcoin bull and former CEO of Twitter.
This is the second time this month Kwon has outlined plans to fortify the reserves backing Terra’s stablecoin.
After TFL donated 12 million LUNA to the Luna Foundation Guard LFG on Friday (worth around $1 billion at current prices) to support growth of the Terra ecosystem and the sustainability of its stablecoins, Kwon outlined that the project will keep “growing reserves until it becomes mathematically impossible for idiots to claim de-peg risk for UST.”
According to data from Coingecko, the marketcap of UST currently sits at $15.12 billion.