For example, let us take the case where each jurisdiction maintains its own national financial policies in a financially integrated world. In a lightly regulated jurisdiction, financial institutions would tend to take on more risks and engage in risky business overseas. Firms and households in that jurisdiction would increase borrowing, including foreign currency denominated borrowing. Such increased leverage could eventually lead to financial instability.
In sum, when "financial integration" and "national financial policy" are chosen, "financial stability" must be sacrificed. To achieve financial stability in the financially integrated world, the authorities need to give away their national financial policies and cooperate with other countries to introduce globally consistent financial policy. GSCs are digital tokens issued against funds collected from customers all over the world.