FSB on Global Stable Coins (GSC)

[Baofeng]

Here is the consultative documents:

Risks and vulnerabilities raised by global stablecoins

2.1.Potential risks to financial stability from a GSCGSCs could pose financial stability risks through some key channels: First, if a GSC were used as a common store of value, even a moderate variation in its value might  cause  significant  fluctuations  in  users’  wealth.  Such  wealth  effects  may  be  sizeable  enough to affect spending decisions and economic activity. Wealth effects may be particularly pronounced in EMDEs where the likelihood of GSCs becoming a mainstream store of value may be higher than in advanced economies (AE). Second, if widely used for payments, any operational disruption in the GSC arrangement might have significant impacts on economic activity and financial system functioning. If users relied upon a stablecoin to make regular payments, significant operational disruptions could quickly affect  real  economic  activity,  e.g.  by  blocking  remittances  and  other  payments.  Large-scale flows of funds into or out of the GSC could test the ability of the supporting infrastructure to handle high transaction volumes and the financing conditions of the wider financial system.

2.2.Vulnerabilities arising from the functions and activities of a GSC arrangementWhile the significance of the individual channels discussed above depends on what a GSC is used for and how widely it is used, the vulnerability of the GSC itself to shocks depends on how the functions  and  activities of  the  GSC  arrangement  are  designed  and  performed.  A  scenario  analysis  conducted  by  the FSB  identifies  three  main  types  of  vulnerabilities.   This scenario analysis focuses on asset-linked GSCs that have reserve assets and where the user has the ability to redeem the GSCs.

https://cryptobriefing.com/wp-content/uploads/2020/04/financial-stability-board-addressing-regulatory-supervisory-oversight-challenges-globals-stablecoin-arrangements-pdf.pdf

Ok it looks like FSB is addressing everything related to GSC like risk and supervisory and oversight challenges. I'm still trying to digest everything, and I'm no expert here. But I don't see any impact at all with crypto in general, specially bitcoin.

What are your thoughts?

[Harlot]

1. Characteristics of global stablecoins

Similarly, the attribute global refers to a stablecoin with a potential reach and adoption across multiple
jurisdictions and the potential to achieve substantial volume, thus posing financial stability
risks, rather than a specific legal or regulatory concept.

The problem that I see here is there own definition of what a stable coin is. If you look at there definition you'll see that a stable coin is considered to be a "GSC" if it has the "potential" to be mass adopted in several countries which the definition itself is pretty vague considering that this report is done by an international body part of the G20. If we look at the current situation now you will clearly see that there are no GSCs at present even though they have a potential to be one I doubt that they'll be the first ones to be mass adopted compared to Bitcoin. Basically they are worried about nothing and just adding a lot of problems to the pile of what we are facing right now, or may I am missing something here like the FSB is just actually trying to prepare for a cryptocurrency-first type of world?

[gentlemand]

The idea of global stablecoins died the second Libra published its intentions. Unless it comes direct from the heart of government or central banking such a thing will never, ever, ever be permitted to exist. End of.

There's no crypto impact.

[BitunaTeam]

The ban on DAI is legally questionable because the DAI is not directly tied to the dollar ramp like Tether.

[gentlemand]

The ban on DAI is legally questionable because the DAI is not directly tied to the dollar ramp like Tether.

There is no Dai ban. They won't know or care what it is. It's irrelevant. It only lives in one microscopic corner of crypto.

This is about things like Libra. That would instantly eat the world and take many currencies with it. If you were in Venezuela would you prefer the Bolivar or Libra? It's a no brainer. That's why they won't permit it.

[figmentofmyass]

The idea of global stablecoins died the second Libra published its intentions. Unless it comes direct from the heart of government or central banking such a thing will never, ever, ever be permitted to exist. End of.

There's no crypto impact.

you sure about that? the FSB report specifically names tether, USDC, and others. these represent a huge amount of bitcoin's fiat market liquidity. a ban, or banking blockade, or enforcement actions against major market players like tether---all of these could have a big impact on crypto markets.

if it wasn't for libra, regulators might not give a shit about stablecoins. unfortunately, they're interested now.

[Ryker1]

Well, here is my personal opinion. There are no propositions stated in this article so I may not be able to know if it is really just to have the GSC. Though there will be a lot of issues and concerns that must be addressed, --this Gsc may really eat other currencies but we cannot conclude if it will give us a better economy or might as well worsen the industry. The Creator of GSC perhaps has there own ideas in addressing these concerns and why they should want to have one world currency.

[Harlot]

Well, here is my personal opinion. There are no propositions stated in this article so I may not be able to know if it is really just to have the GSC. Though there will be a lot of issues and concerns that must be addressed, --this Gsc may really eat other currencies but we cannot conclude if it will give us a better economy or might as well worsen the industry. The Creator of GSC perhaps has there own ideas in addressing these concerns and why they should want to have one world currency.

If you look at the document's header you'll see that this is a potential "embargo" for several developed countries. What it does if countries in the G20 will based their findings of the opinion of FSB in the article they have written out. Personally FSB created their conclusion without bias towards cryptocurrencies but basically the threat they are calling "GSC" is something nonexistent as of the moment. Right now this potential embargo they are planning is a preparation for what is it to come when a cryptocurrency plans to become a GSC, countries part of the G20 who have agreed with the embargo would essentially not accept the GSC in their country.