to all and cannot be withheld, even from people who do not pay for the resource. but unlike public goods, consumption by an individual or a group of individuals does reduce the resource's availability to others. 5 a typical example is fishery resources. overconsumption of a common - pool resource can lead to the complete and permanent destruction of the commonpool resource. this problem is known as the " tragedy of the commons. " 6 when farmers put their cows on a common pasture, each individual farmer will put as many cows on the pasture as possible, acting independently according to his own self - interest. this will eventually result in the over - exploitation and destruction of the pasture, and all farmers will be damaged. gscs could bring about a " tragedy of the commons. " central banks provide public goods ( i. e. financial and monetary stability ) through monetary and prudential policies. meanwhile, gsc is a scheme that utilizes public goods ( i. e. financial and monetary stability ), provided by central banks. if gscs are widely used with over - exploitation of public goods in such a way that gscs begin to substitute for fiat currency in each jurisdiction and gsc - denominated transactions and assets / liabilities increase, this would undermine the monetary policy transmission of central banks. when the effects of monetary policy are weakened, the while a public good satisfies both " non - rivalry " and " non - excludability, " a common - pooled resource exhibits only " non - excludability. " 6 hardin, g, " the tragedy of the commons, " science, 1968, vol. 162, 1243 – 1248. provision of public goods ( i. e. financial and monetary stability ) will be disturbed, and this would destabilize not only the value of gscs but also overall economic activities. this can be thought of as the financial version of a " tragedy of the commons. " a wide use of stablecoin on a global scale could transform financial stability from a public good into a common - pool resource. the risk of currency substitution to gscs could be higher for countries with a weak economic base and lacking effective payment infrastructures. when the effects of monetary policy are undermined by the spread of currency substitution across these countries, it would lead to instability in the real economy, the impact being transmitted to other countries. given the progress in economic globalization and stronger interdependencies among financial systems

a need for a financial diplomacy strategy, and ( 5 ) it should take due account of international political and security issues. these principles, notably the second principle, seem to be different from the exchange rate targeting proposal. prof. mccallum regards the separation by government of exchange rate policy and monetary policy as an anachronism, because of the linkage of exchange rate and interest rates within the general equilibrium framework. 17. second, we should put emphasis on the need to deal with the euphoria brought about by higher expected growth and the sharp drop in " finance premium " during the bubble period. the increasing collateral value compressed the finance premium for real estate and corporate borrowing. the aggressive risk - taking was facilitated by financial deregulation and the higher expected growth rate under price stability, in part due to mistaken perceptions of future technological progress ( figure 7 ). 18. today, we see a similar problem with low term - and risk premia, which constitute one of the causes of the " conundrum of global low long - term interest rates ". we observe that the real long - term interest rate among major advanced economies has tended recently to converge at around 2 % ( figure 8 ). given the low term - and risk premia across various financial markets, the low real long - term rate implies that any country which has higher expected growth rate, significantly above 2 %, is liable to register the acceleration of asset prices. 9 19. third, it may be useful to extract a signal or guide to future price developments from asset price changes by examining the factors and the sources of asset bubbles, to the extent that there exist various distortions and imperfections in financial markets. although it may be desirable to have an intertemporal cost of living index, this might not help us in the near future. it is possible instead to show the likely consequence of deviation of asset price from the historical trend or the simulated fundamental price based on models. it is interesting to note that the oecd ( 2005, 2006 ) identified the deviation of the actual rent - to - price ratio from the fundamental ratio based on the long - term historical average ratio, employing the inverse of user cost as a proxy to the price - to - rent ratio, as the user cost equates the expected cost of owning a house with the cost of renting. further, the oecd estimated the nearing of a peak to real house prices, if interest rates were to rise further. 20. fourth