Reuters noted the prospects of bitcoin as a reserve currency
Bitcoin has more and more reasons to become the reserve currency of the new era, writes Reuters . Seoul -based crypto platform Terraform Labs is set to stockpile $10 billion worth of bitcoin to back its own stablecoin, the information has sparked a buzz in the market.
To date, Terraform Labs has already acquired about 40,000 bitcoins worth about 1.7 billion. The deals went through a non-profit company associated with her, Luna Foundation Guard.
Terraform co-founder Do Kwon announced plans to buy $10 billion worth of bitcoin in March. Stablecoins are usually backed by reserves in dollars, but the Korean platform wants to provide the value of TerraUSD with the most popular cryptocurrency.
Past and forthcoming transactions of the Korean platform have already supported the price of bitcoin, but more importantly, others may follow the example of Terraform, Reuters notes.
“Buying $10 billion worth of bitcoin could affect the price in the short term. But in the long run, it sends a far more important signal: Bitcoin is beginning to be seen as the most desirable form of collateral for currencies,” says Sydney -based crypto company Maple Finance CEO Sid Powell.
Stablecoins are rapidly gaining popularity. TerraUSD is now one of the five largest currencies in the sector and is pegged to the dollar through a special algorithm that moderates supply and demand through a special process involving the Luna balancing token. Digital asset research firm VanEck suggests that other platforms with their algorithmic stablecoins will follow Terra’s lead and back them not only with bitcoin, but possibly other crypto assets as well.
The cost of bitcoin at the time of writing is about $ 40,200 – over the past day, the price has decreased by more than 4 percent.
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