Do Kwon, the founder of Terraform Labs and Terra (LUNA), outlined the plan to buy $10 Billion worth of Bitcoin for its stablecoin reserves.
Kwon took to Twitter on Monday, announcing the move of accumulating $10B in bitcoin. This whopping amount of investment in BTC will “open a new monetary era of the Bitcoin standard”, he said.
Terra is a decentralized blockchain popular for minting stablecoins. It has its own stablecoin Terra USD (UST) which is pegged to US dollars. Stablecoins are digital substitutes for fiat currencies. Their prices do not fluctuate like other cryptocurrencies.
The native toke of Terra blockchain LUNA maintains the value of USD. Kwon mentioned on March 14th that TerraUSD will be backed by $10 billion-plus in BTC reserves. However, the blockchain owner has no plans of selling LUNA.
P2P electronic cash that is easier to spend and more attractive to hold #btc
— Do Kwon 🌕 (@stablekwon) March 14, 2022
Terra is already buying BTC to maintain reserves. According to Kwon, BTC reserve will be used to Backstop UST redemption and for a decentralized forex reserve.
Do Kwon’s profile was also recently verified on Twitter. He candidly tweeted, “We start buying BTC and Twitter verifies me, I see you Jack,” referring to Jack Dorsey, the co-founder of Twitter who is also a big proponent of Bitcoin.
TerraUSD is establishing itself as a reliable stablecoin backed by reserves worth billions of dollars. On Friday, TFL donated 12 million LUNA to Luna Foundation Guard (LFG) for supporting the Tera ecosystem.