Terra Gets $32 Million Backing by Crypto Exchanges

Karan Balwani

August 30, 2018 11:12 am

Cryptocurrency News

Terra Gets $32 Million Backing by Crypto Exchanges
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Binance, the crypto giant has partnered with three other exchanges to fund Terra. Terra is an upcoming project that is focused towards encouraging customers to use stable coin.

Stable coins are virtual currencies whose value is pegged by fiat money. This is done to protect the users from the volatile nature of Bitcoin and other cryptocurrencies.

The Korean-American founders of Terra have raised $32 million from various exchanges for their project. The company has also received financial backing from Polychain Capital, an investment fund focused on the blockchain. Meanwhile, Binance has provided funding through Binance Labs, an independent investing fund.

Even though there is no shortage of stable coins in the market, Terra has an advantage. The company has partnered with various Asian e-commerce outlets as a means to encourage the use of their currency.

Daniel Shin, Co-founder, Terra used to run an e-commerce company in Korea. His experience with the platform has helped Terra develop this business strategy. Consumers are not the only ones who are going to benefit from this platform. Merchants will have to pay only a fraction of transaction fee that they have to pay to Mastercard, Visa, and other payment providers.

Shin appreciated the ease of doing business in the Asian market. He also commented on the business-friendly regulatory policies and the cultural environment that these countries offer.

Shin further commented that Terra will start out with tokens backed by fiat currency that it has raised from various investment partners. The company is planning to raise $100 million dollars for their project.

The real challenge for Terra and other stable coin projects is to encourage adoption of stable coins for their purchases. Another challenge is to convince users that the value of the stable coin is stable, being pegged to the US Dollar or any other fiat currency.

The four exchanges that have provided monetary support to Terra are Binance Labs, OKex, Huobi Capital and Duname & Partners.

There are other types of stable coins in the market. Basis is a stable coin under development that is backed by a series of bond sales for the retention of its value.

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