Billion-Dollar Returns: The Upside of Facebook’s Libra Cryptocurrency

 

 At first glance, Facebook’s Libra cryptocurrency doesn’t make sense. 

On its face, it is a non-speculative token which uses enough decentralization to make it difficult if not impossible for Facebook to profit off it as the company does from its social media platform.  
But in crypto, there is always an upside to the people who launch a new protocol, in the event the protocol succeeds and even in many cases for simply having started development of the project.
This article deals specifically and exclusively with that upside, admittedly handwaving aside many other potential issues with the protocol, to be addressed elsewhere.

Libra users

It’s important to realize that Facebook is actually launching two cryptocurrencies: the one everyone’s talking about (Libra) and the one available only to Facebook and its corporate partners (the Libra investment token).
The former will be backed by a basket of fiat currencies and cash equivalents, which means that for every dollar of Libra in existence, there will be (in theory) a “dollar” worth of real-world assets which that token may be exchanged for under certain conditions.  
As a normal user, you’d get $100 worth of Libra by spending $100. Your Libra can (again, in theory) be used across a variety of platforms or sent to an approved friend. 
The Libra Association (a Swiss not-for-profit) puts your $100 into a variety of low-risk, short-term investments like U.S. Treasury bills. As of July 1, the one-month T-bill was yielding 2.125 percent on an annualized basis, so the association would earn $2 and change on your $100 Libra purchase.
What happens to that money?

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