Do Kwon, the founder of Terraform Labs (TFL) and Ethereum competitor Terra, has planned to accumulate a whopping $10 billion worth of Bitcoin (BTC) to add to the project’s stablecoin reserves.
It has been reported that its Terra USD (UST) is an algorithmic stablecoin pegged to the value of the United States dollar, with the USD value partly maintained via an equivalent amount of its native token Terra (LUNA). However, specific details are sparse at this stage.
Kwon said 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 over $10 billion 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.”
The report said that 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.
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.
Thus, 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 the 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.”