Why Terra Is Planning To Add $10B In Bitcoin Reserves

Terra LUNA/USD co-founder Do Kwon said he plans to add $10 billion worth of Bitcoin BTC/USD to the project’s reserves.

What Happened: Kwon announced the move on Twitter, saying that Terra having huge Bitcoin reserves will “open a new monetary era of the Bitcoin standard.”

He added that the reserve Bitcoin would be used to backstop short-term redemptions of TerraUSD UST/USD — the U.S.-dollar value pegged stablecoin of the Terra blockchain — and for a decentralized foreign exchange reserve.

Further, Kwon said the blockchain platform will not sell LUNA to build the Bitcoin reserves.

See Also: How to Buy Terra (LUNA)

Why It Matters: Last week, Kwon had announced that Terraform Labs (TFL) donated 12 million LUNA to the Luna Foundation Guard (LFG) and said that the project will keep growing reserves to become “mathematically impossible for idiots to claim de-peg risk for TerraUSD.”

In early March, it was reported that Terra surpassed Ethereum to emerge as the second-largest staked asset among major cryptocurrencies. LUNA is the second-largest DeFi protocol behind Ethereum.

Price Action: LUNA is down 0.2% during the past 24 hours, trading at $88.08 at press time.

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