Source from:

• https://validator.info/terra-classic/governance/12163
• https://common.xyz/terra-luna-classic-lunc/discussion/183561-reclassification-of-terrausd-ustc-to-universal-standard-token-classic-ustc

Reclassification of TerraUSD (USTC) to Universal Standard Token Classic (USTC)

Summary

This proposal seeks approval to reclassify TerraUSD (USTC) from an algorithmic stablecoin to a memecoin, with a rebrand to Universal Standard Token (Classic) (USTC). The objective is to align USTC’s classification with it’s actual market behavior, protect exchange listings, and safeguard Terra Classic’s economic stability amidst increasing regulatory pressures. Without this change, USTC faces a high risk of delistings that could significantly impact validator and delegator rewards, as well as overall chain sustainability.

Motivation

Since the collapse of the algorithmic stablecoin mechanism in 2022, USTC has not functioned as a stablecoin and has instead become a speculative asset driven by community interest. However, its continued classification as a stablecoin makes it a regulatory target under emerging frameworks such as MiCA (Markets in Crypto Assets) in the EEA and potential global regulations like the Genius Stable Coin Act.

If USTC remains categorized as a stablecoin, it cannot meet reserve or licensing requirements, exposing it to delistings. Binance has already announced that USTC will be delisted for EEA users by March 31, 2025, with similar actions likely to follow on other exchanges. A full delisting from major platforms would have severe consequences for Terra Classic’s revenue stream, validator commissions, and the stability of the ecosystem.

Rebranding USTC as a Universal Standard Token (Classic) (USTC) solves this issue.

A memecoin classification

• Accurately reflects reality – USTC is speculative and community-driven.
• Bypasses regulatory restrictions – Memecoins are not subject to stablecoin reserve or licensing requirements.
• Preserves exchange listings – Protecting trading volume, oracle pool revenue, and validator/delegator incentives.

Proposed Changes

1. Name Change: TerraUSD → Universal Standard Token Classic

The name TerraUSD is directly tied to its failed stablecoin past. Rebranding to Universal Standard Token Classic reflects its current market status and leverages the speculative, community-driven nature that has kept it relevant.

2. Ticker Change: Not Required

Maintaining the current ticker will ease the burden of rebranding, while maintaining brand recognition within Terra Classic and broader crypto markets.

3. Classification Change: Algorithmic Stablecoin → Memecoin

USTC lost all stablecoin properties in 2022. Officially recognizing it as a memecoin brings regulatory clarity, protects its exchange presence, and allows it to thrive within its actual use case—community speculation.

Economic and Market Impact

If USTC is delisted from Binance and other exchanges, Terra Classic loses a major income source from oracle pool distributions. Validator commissions and delegate rewards, partly composed of USTC, rely on its price and trading activity. A sudden loss of exchange liquidity could cause a massive sell-off, devaluing the asset and severely impacting Terra Classic’s economy.

Binance’s Holdings and the Delisting Risk

Binance is the largest custodial holder of USTC, having accumulated a significant supply post-collapse. If Binance follows through with a full delisting, it may attempt to offload its holdings, triggering a bank run as holders rush to sell. This would cause a rapid price crash, destabilizing the ecosystem. The only viable solution is to ensure Binance does not delist USTC—which is only possible by removing its stablecoin classification.

Rebranding to Universal Standard Token (Classic) (USTC) ensures that Binance and other exchanges can continue listing the asset under a different framework, preventing a mass liquidation event.

Implementation Plan

1. Governance Proposal

• Submit an urgent governance proposal to approve the reclassification.
• Changes to be enacted:
• TerraUSD → Universal Standard Token (Classic) (USTC)
• Stablecoin → Memecoin

2. CMC & CoinGecko Reclassification

• Submit requests to CoinMarketCap and CoinGecko to update the classification from stablecoin to memecoin.
• Provide governance approval as documentation.

3. Engagement with Binance

• Formally request Binance to adopt the reclassification.
• Provide governance documentation and evidence that USTC has not been a stablecoin since 2022.
• Argue that USTC, as a memecoin, is exempt from MiCA’s stablecoin delisting rules.
• Request Binance to publicly confirm support, reinforcing market confidence.

4. Coordination with Other Exchanges

• Once Binance is on board, manually reach out to all other exchanges (CEXs and DEXs) listing USTC.
• Present Binance’s adoption as a precedent: “Binance supports Universal Standard Token Classic. Will you?”
• Engage on-chain Terra Classic projects to update references to USTC.

5. Leverage Binance’s Influence

• If Binance confirms USTC’s status, this sends a strong signal to other exchanges, reducing risk of further delistings.
• A single Binance announcement confirming USTC as a memecoin could solidify exchange-wide adoption, preventing a collapse of Terra Classic’s ecosystem income.

Next Steps

With no automatic enforcement mechanism on-chain, this transition requires active coordination. Binance is the linchpin—securing their adoption first creates momentum for a broader rollout. The March 31, 2025, deadline for Binance’s delisting of USTC in the EEA means action must be taken immediately to prevent financial and reputational damage to Terra Classic.

Voting Options

• Yes – Approve the reclassification of TerraUSD to Universal Standard Token Classic, ensuring exchange continuity and regulatory clarity.
• No – Reject the proposal and maintain the existing classification, risking delistings and economic instability.
• Abstain – No strong opinion.
• No with veto – Reject the proposal and penalize the proposer.

This is a critical proposal for the survival of Terra Classic’s economy. Without this transition, USTC will likely face widespread delistings, leading to a major downturn in revenue, loss of validator incentives, and a potential price collapse. Reclassifying to Universal Standard Token (Classic) (USTC) keeps USTC tradeable, relevant, and outside regulatory constraints.