Facebook's stablecoin and interest

Per Matt Levine, Facebook is setting up a cryptocurrency backed by a variety of low-risk assets, but they're not stabilizing it the way I would.

Users of Libra do not receive a return from the reserve. The reserve will be invested in low-risk assets that will yield interest over time. The revenue from this interest will first go to support the operating expenses of the association — to fund investments in the growth and development of the ecosystem, grants to nonprofit and multilateral organizations, engineering research, etc. Once that is covered, part of the remaining returns will go to pay dividends to early investors in the Libra Investment Token for their initial contributions.

If one were to use Libra as a unit of account, and ask what the "risk-free" interest rate in Libra would be, the answer should be more or less equal to the average return on the assets being used to back it.  I would propose that instead they retain all returns in the reserve, take out a fixed fee (say 2% per year) to manage the ecosystem and pay out returns to investors, and allow the value of the coin to follow the pro-rata share of the reserve.  This fixes the "risk-free" interest rate for Libra at 2% — if it takes off and becomes a significant unit of account for long-term transactions, this will increase its suitability for that purpose by eliminating interest rate risk.  In particular, even if some of the currencies in the basket start to hyperinflate badly, and their interest rates go way up, the coin remains stable in a more absolute sense, and the rate at which it depreciates compared to risk-free investments is relatively unaffected.

Note 1:  I would like to see a fixed interest rate; I use 2% in the example, but another number might be better.  It should be high enough that the costs are covered, which might be a tricky number to come up with if those costs don't scale linearly with the size of the pool; probably you should pick a conservative size and expect that the early backers may have to subsidize it while it's small.  Conditional on its being "large enough", though, I'd rather it be as small as possible, though of course my money's not on the line here.

Note 2:  If the interest rate is close to 0, and you're in a society in which "interest" is repugnant, then denominating transactions in this currency allows you to avoid the problems this creates for positive interest currencies.  This note highlights that "interest" isn't some absolute economic phenomenon; it's a property of the unit of account, and in particular of its failure over time to capture the true market rate at which value at different points of time are being traded.