Bitcoin (BTC) is the collateral asset of choice for the world’s largest decentralized stablecoin.
Speaking to Bloomberg on April 4, Do Kwon, co-founder of the Terra Blockchain protocol, has pledged to continue buying BTC to support the firm’s TerraUSD (UST) stablecoin.
Kwon: BTC purchases will continue “in perpetuity”
Terra has made waves in and out of the cryptocurrency community in recent weeks thanks to his massive bitcoin purchases.
At the moment, Terra’s reserves, from the Luna Foundation Guard (LFG), must be expanded to the equivalent of USD 10 billion.
In his last comments, however, Kwon went further: he said that as long as UST is being minted, Terra will keep buying BTC to back it up.
“One important thing to remember about what we’re going to do is this is not a corporate treasury decision in the sense that I’m not buying bitcoin,” he told Bloomberg TV.
“I’ve already donated money so that we can build these reserves on behalf of the community and we plan to do this in perpetuity, so the $3 billion or so that we initially bought to start the reserves is going to be followed by…persistent purchases.” of bitcoin through the age of UST… each time UST is minted, new bitcoin will be added to the reserves.”
As a decentralized stablecoin, anyone can “mint” UST by burning $1 of another decentralized asset, Kwon explained. UST is the largest decentralized stablecoin, with a market cap of around $16.5 billion. Tether (USDT), the largest stablecoin as a whole, has a market cap of $82 billion.
“The easy way to understand it is that we are using bitcoin to create a decentralized currency reserve for the Terra stablecoin,” summarized.
Are we facing the biggest corporate whale of bitcoin?
The Luna Foundation Guard is in green, and the co-founder of Terra, Do Kwon stresses that he is not “capable of moving” the bitcoin markets.
Although last week said cryptically to his followers that he had “just begun”, Kwon has not yet given more concrete details about the timing of BTC purchases.
The wallet owned by LFG last received entries on March 30. At 30,727 BTC, it is the 29th largest BTC address.
Once completed, Terra’s reserves will exceed those of any corporate treasury, making Kwon and his team the biggest Bitcoin whale.
Clarification: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information set forth herein should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
Investments in crypto assets are not regulated. They may not be suitable for retail investors and the full amount invested may be lost. The services or products offered are not aimed at or accessible to investors in Spain.