Terra founder Do Kwon in a tweet on Tuesday revealed plans to increase UST’s bitcoin reserves to $10 billion. The Luna Foundation Guard has already raised $2.2 Billion and plans to meet the short-term target of $3 Billion. With $10 billion as the long-term target. Do Kwon believes the UST stablecoin’s sovereignty is the only realistic model to scale decentralized money.
Do Kwon’s Plan To Increase UST’s Bitcoin Reserves
Terra founder announces in a tweet regarding the plan to build $10 billion in BTC reserves for TerraUSD (UST). He says UST peer-to-peer electronic money is easier to spend and more attractive to hold than Bitcoin. Commenting on the current UST’s bitcoin reserve and infrastructure, he said:
It’s not 10B today – as UST money supply grows a portion of the seigniorage will go to build BTC reserves bridged to the Terra chain. We have 3B funds ready to seed this reserve, but technical infrastructure (bridges, etc.) is still not ready yet.
The Luna Foundation Guard (LFG), a Singapore-based non-profit for Terra ecosystem, has already raised $2.2 billion. From which, $1 billion was raised through an over-the-counter selling of Terra’s native token LUNA to establish a decentralized UST forex reserve denominated in BTC. Jump Crypto, Three Arrows Capital, GSR, DeFiance Capital, Republic Capital, Tribe Capital, and others were involved in the $1 billion funding round. While the other $1.2 billion was raised by selling UST in exchange for Tether.
Do Kwon says bitcoin can help the price of TerraUSD (UST) stay pegged with the US dollar despite a selloff in the crypto market. Unlike other stablecoins, UST is an algorithmic stablecoin that burns or creates LUNA in order to remain pegged to the US dollar.
Thus, Kwon and LFG are possibly looking to strengthen UST stability with the dollar by planning to build a bitcoin reserve of $10 billion.
UST and LUNA price update
At the time of writing, the price of Terra (LUNA) is trading at $95.28, rising nearly 2% in the last 24 hours. In the last week, the LUNA price rose nearly 20%, with the UST price currently pegged to the US dollar. With Terra planning to build its large bitcoin reserve, the price of Bitcoin (BTC) can rise to new highs.
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