Terraform Labs (TFL) and Terra (LUNA) founder Do Kwon has outlined plans to accumulate $10 billion worth of Bitcoin to increase the project’s stablecoin reserves. Terra is a decentralized blockchain platform focused on stablecoin mining. Terra USD (UST) is an algorithmic stablecoin pegged to the US Dollar, with USD value maintained in part via an equivalent amount of its native token LUNA.
While there are no specific details at this time, Kwon said on Twitter that Terra will not sell LUNA to build its reserves and that more information will follow soon. Kwon also stressed that he is very bullish on his stablecoin Terra USD (UST), which is backed by over $10 billion in BTC reserves, ushering in a new monetary era of the Bitcoin standard, he says.
“P2P e-money that’s easier to spend and more attractive to hold. […] $UST with $10B+ in $BTC reserves will open a new monetary era of Bitcoin standard. P2P e-money that is easier to spend and more attractive to hold #btc.”
When questions surfaced on Twitter about what the BTC reserves are being used for, he said the funds are being used to halt short-term UST repayments and a decentralized FX reserve.
Kwon, in a nod to Jack Dorsey, who is a bitcoin bull and former CEO of Twitter, wrote: “We start buying BTC and Twitter verifies me, I see you Jack.”
For the second time this month, Kwon has spoken out about plans to bolster reserves designed to shore up Terra’s stablecoin. Kwon further explained that TFL donated 12 million LUNA to the Luna Foundation Guard LFG on Friday. This is to protect the sustainability of stablecoins. The aim is also to sustain growing reserves until it becomes mathematically impossible to de-risk UST.