Swiss asset manager GAM Holding said on Friday that it is in talks with Terra developer TerraForm Labs to potentially support the UST stablecoin.
GAM said it could potentially invest between $2 billion and $3 billion to burn off the excess supply of USD, as the token gets dumped. GAM intends to help Terra reestablish the UST peg at $1.
The move comes amid reports that Terra UST was enlisting the help of private capital to support Peg. Blockchain reportedly sought over $1.5 billion.
Terra founder Do Kwon also recently said that Terra is considering creating UST traditionally collateralized stablecoinsWhich requires far more capital.
GAM sees potential in UST
GAM said in a press release that the main rationale behind supporting UST was that it sees potential in the Terra ecosystem. The firm is also believing in the algorithmic mechanism of UST to maintain its peg.
When Black Swan events hit the markets, opportunities blossom. We see opportunity in UST’s recent activity, and continue to see promise in Terra’s broader strategy
-GAM Chief Executive Peter Sanderson
GAM, headquartered in Zurich, has more than $95 billion in assets under management. It is also publicly listed on the SIX Swiss Exchange.
terra network stopped
Prior to the announcement, Terra halved its blockchain to minimize further losses in its main token. This was the second halt of the network in the last 12 hours, in which trading has not yet resumed.
The move turned to new lows below $0.2 UST. Terra has outlined a number of measures to support the token, including burning additional UST and mining more LUNA to support the peg.
Nevertheless, its measures have so far proved ineffective. It has also drawn increasing criticism of the project and its founder, Kwon.
The massive withdrawal from the blockchain has rendered it almost completely devoid of capital, making any solitary recovery effort quite futile.
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