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The giant Crypto Binance and three other major exchanges are joining together to fund Terra, a new initiative to induce consumers to adopt digital money using a so-called "stable currency".
The idea of stable coins, as the name suggests, is to provide a cryptocurrency without the notorious volatility of Bitcoin and other popular digital goods.
To pursue the idea, Terra and its Korean-American founders raised $ 32 million from stock exchanges and investment funds focused on the blockchain, including Polychain Capital.
While Terra is certainly not the only stable coin project out there, it contains a twist: Terra is collaborating with a series of eCommerce in Asia to encourage consumers to use currency.
One of the Earth founders, Daniel Shin, ran an e-commerce company in Korea. In an interview with Fortune explained that e-commerce is more common in Asia and that well-known online brands will convince consumers to try Terra using popular mobile platforms such as WeChat.
the commercial strategy will involve the granting of discounts and rewards for consumers using Terra. Merchants, meanwhile, have an incentive for Terra to succeed as it allows them to pay only a fraction of the transaction fees that are currently being donated to Visa and other payment providers.
"Imagine going to Amazon and clicking" pay land "at the time of payment.You do not need a wallet, etc. All you know is that it's a better deal," said Shin, adding that Asia provides the most favorable regulatory and cultural environment for the launch of the project.
The biggest challenge on Earth, as with other stable currencies, will be to convince people that the currency is indeed stable and its value will remain pegged to the dollar or to another important legal currency.
Currently, the most popular stable currency, known as Tether, has maintained a one-to-one value with the United States. dollar, but some have wondered if its supporters actually have dollar reserves to support it. If it turned out that the Tether was not fully supported, its price could collapse.
Meanwhile, another stable money project known as Basis, which is still in a development phase, intends to rely on an exotic series of bond sales to maintain its value.
According to Shin, Terra will initially return its tokens with fiat currency generated by its investment partners. The company, he says, plans to raise a total of $ 100 million and use 90% of that for the currency reserve.
Shin adds that once Terra gets widespread traction, each transaction will generate a small payment to a second cryptocurrency that will serve as a stabilizing reserve fund, and will eventually free the project from the legal currency.
The ultimate strategy, says Shin, is that Terra creates a "sticky" network of payments with the backs of current e-commerce networks, as much as PayPal and Alipay have done before.
The four cyprocurrency exchanges to support the project are Binance Labs, OKEX, Huobi Capital and Dunamu & Partners (the investment company of Upbit Dunamu).
