Terra Buys $135M in Bitcoin for Stablecoin Reserve

Do Kwon, co-founder and CEO of the company behind the Terra blockchain, confirmed it had bought over $1 billion in bitcoin since the end of January, Bloomberg wrote.

That includes $135 million in four purchases Monday (March 28).

Kwon said the Bitcoin address used by the Luna Foundation Guard, out of Singapore, was used to buy the crypto.

Bitcoin has been seeing a comeback over the weekend compared to losses earlier this year.

Kwon announced earlier this month that the UST stablecoin would be backed by a reserve of bitcoin which could hit $10 billion.

Kwon tweeted on March 22 that he had $3 billion in funds ready to buy assets to back the stablecoin.

Terra’s buys are partly in response to criticism surrounding UST, which is not backed by a fiat currency like centralized stablecoins such as Tether.

The coin has been able to maintain its link to the dollar by issuing and destroying Luna tokens, the native crypto for Terra, and for every UST created there will be $1 worth of Luna burned on the Terra blockchain.

A bitcoin reserve for UST will help UST’s ability to keep the dollar peg – helpful particularly for when Terra faces a short-term demand in redemption of UST.

See also: Bank of England Hints at Stablecoin Regulation

In other news centered on digital currencies, PYMNTS wrote that the Bank of England published a report saying there might be more regulations coming for crypto and stablecoins.

The report notes that the BoE describing the role of crypto and decentralized finance in the financial system, saying that they’re still too small to cause much disruption.

However there could be more growth that could necessitate more regulations.

For stablecoins in particular, though, the BoE seemed to have a clear idea of what the risks are, writing that there needs to be a way to ensure that the risks are managed for the good of the payment system.



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