Do Kwon, the founder of Ethereum competitor Terra (LUNA), shares his plan to buy bitcoin for 9 billion euros. That bitcoin Kwon wants to use for stablecoin reserves. Bitcoin should act as a hedge for the value of the stablecoins. Terra is a decentralized blockchain platform that specializes in issuing stablecoins.
'A new era of the bitcoin standard'
The Terra USD (UST) is an algorithmic stablecoin that is pegged to the value of the US dollar. It does this in part with its own LUNA token, but bitcoin should therefore also play an important role in this. There is no clarity at the moment, but Kwon let it be known via Twitter that Terra is not selling LUNA to build up reserves.
Do Kwon is convinced that the TerraUSD (UST) - backed by $10 billion (9 billion euros) in bitcoin - is the beginning of a "new monetary era of the bitcoin standard." He himself calls the UST peer-to-peer cash that is easier to spend and more attractive to hold because of the bitcoin coverage.
Cointelegraph contacted Kwon to ask him about his plans. Specifically, to check if the plans are already in progress or if they are just an idea at the moment. Kwon's answer leaves little to the imagination. "I don't understand the difference. We already buy bitcoin," the Terra founder said.
Twitter users who were curious about the plans with all that bitcoin also provide Kwon with an answer. Initially, the funds will be used for the possible buyback of UST and for a decentralized forex reserve to cover itself against unexpected events.
Do Kwon winks at Jack Dorsey
In a tweet shortly after his story on bitcoin, Do Kwon addresses Jack Dorsey. The former CEO of Twitter who is known as a true bitcoin maximalist. "We start buying bitcoin and Twitter gives me a verified account, I see you Jack," Do Kwon said towards Jack Dorsey.
Of course, Dorsey is no longer the CEO of Twitter at this time and no doubt Kwon is aware of this. At the moment, Dorsey, with his company Block, the former Square, is fully focused on accelerating global bitcoin adoption. If it were up to Dorsey, bitcoin would become the new world reserve currency as soon as possible.
This is the second time this month that Do Kwon has unveiled plans to strengthen the reserves that cover Terra's stablecoins. Previously, Terraform Labs donated 12 million LUNA to the Luna Foundation Guard (worth about 900 million euros) to support the growth of the Terra ecosystem. In doing so, Kwon indicated that the project will continue to grow the reserves "until it is mathematically impossible for idiots to claim a decoupling risk for the UST."
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