FSB pointed out that GSC may bring potential risks to financial stability through some key channels:
Firstly, store of value. If the GSC is used as a universal store of value, then even a moderate change in value may lead to significant fluctuations in users’ wealth, which may be enough to affect expenditure decisions and economic activities. These effects are particularly evident in emerging markets and developing economies, where GSC is more likely to become a mainstream store of value than in advanced economies (AE).
Secondly, payment. If GSB is widely used for payment, then any interruption of operation may have a significant impact on economic activities and the operation of the financial system. If users rely on stable coins for regular payments, a “major interruption of operation” could quickly affect actual economic activity (such as preventing remittances and other payments).
Thirdly, the risk exposure of financial institutions. The exposure of financial institutions may expand in scale and change its nature, especially if the financial institution plays multiple roles in the GSC project, such as as a dealer, wallet provider, manager, or custodian/trustee of reserve assets. FSB cautioned that this may be a source of market, credit and operational risks.
Fourthly, magnify the confidence coefficient. The large-scale use of GSC may magnify the confidence coefficient. FSB believes that greater sensitivity to trust effects may also reflect the extent to which GSC is used as a store of value and payment method. In addition, close contact with financial institutions may also cause GSC to suffer adverse trust effects, such as making financial difficulties for dealers who act as GSC projects.
