VOA - Could Bitcoin Become a Reserve Currency
This is my series to learn english. I have a target 6.5 IELTS on next year. So, I’m looking for the most effective way to learn English. I will try my best to learn. I have to get it. These are the articles that I find interesting to read. I just pratice retyping the existing articles. Here is a root article: Could Bitcoin Become a Reserve Currency - by By Dan Novak 17 April 2022 Root Articles or you can find all at: https://www.51voa.com/.
FILE - A bitcoin symbol is presented on an LED screen during the closing ceremony of a congress for cryptocurrency investors in Santa Maria Mizata, El Salvador, Saturday, Nov. 20, 2021. (AP Photo/Salvador Melendez)
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These is a growing movement to make bitcoin a reserve digital currency. One cryptocurrency platform is hoping to own $10 bilion worth of bitcoin to back its own “stablecoin”. Stablecoins are a growing group of cryptocurrencies that aim to lessen price changes and are usually backed by US. dollar reserves.
The platform is called Terraform Labs. It is based in Seoul, South Korea. So far, it has built up nearly 40,000 bitcoin worth $1.7 billion in a series of purchases through a non-profit called Luna Foudation Guard.
Do Kwon is Terraform’s co-founder. Last month, he announced on Twitter that the compary would buy $10 billlion worth of bitcoin researves to back TerraUSD.
The purchases and the possibility of more to come are helping raise the price of bitcoin, now worth $48,000. It is unclear, however, it others will flow Terraform’s lead.
“Buying $10 billion worth can move the price in the short term” said Sid Powell, CEO of Sydney-based crypto lender Maple Finance. “But over the longer period, it’s more what it signals - that bitcoin has been introduced as the hottest form of collateral backing for currencies”
Yet other market experts said that a closer relationship between bitcoin and stablecoins like TerraUSD could introduce a new risk for crypto markets.
“There is a danger some people are trying to position long ahead of the buying which could exaggerate a fall if the pricce starts to” decrease, said Richard Usher. He is with the crypto compary BCB Group in London.
Stablecoins are quickly gaining popularity. They are a common form of exchange. They are often used by traders seeking to move funds around and predict the value of other cryptocurrencies.
For example, it is much easier to spend tether – the biggest stablecoin – for bigcoin or other crypto, than it is to spend U.S. dollars for bitcoin.
TerraUSD is now the fourth-largest stablecoin. Like other stablecoins, it is attached to the dollar.
The bitcoin reserves add another level of security, while keeping the Terra project decentralized.
Mattew Sigel is a market researcher. He said he expected other stablecoins to follow Terra’s lead and back it their coins with reserves of bitcoin. They could even back it with other cryptocurrencies, if the experiment succeeds.
I’m Dan Novak. Dan Novak adapted this story for VOA Learning English from reporting by Reuters.
Words in this story
| Word | Type-Mean | Example | Image |
|---|---|---|---|
| reserve /rɪˈzɜːv $ -ɜːrv/ |
(Sport, Trade ) | noun | A supply of something kept to be used if it is needed |
$10 million in cash reserves |  |
| worth /wɜːθ $ wɜːrθ/ |
noun [uncountable] The value of something in money |
What’s the current worth of the company? |  |
| non-profit |
Business An organization uses the money it earns to help people instead of making a profit |
A non-profit educational institution |  |
| collateral kuh·la·tuh·ruhl |
Loan The term collateral refers to an asset that a lender accepts as security for a loan |
She put her house up as collateral for the bank loan |  |
| Expert ek.spuht |
a person who is very knowledgeable about or skilful in a particular area. | He’s an expert on the Cold War. expert on expert in |
 |
| Exaggerate uhg·za·juh·rayt |
To make something seem better, larger, worse etc than it really is | I couldn’t sleep for three days – I’m not exaggerating. |  |
| gain /gayn/ |
To obtain or achieve something you want or need | After gaining independence in 1957, it was renamed ‘Ghana’. |  |
Conclusion
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