Hey,
I am right now a little bit researching about financial stability and monetary policy.
It seems that monetary policy through a central bank is pretty important for the global financial stability.
For example if there is a financial crisis, central banks try activly to stabilize the financial system.
If Bitcoin would replace fiat money and such a crisis would occur, wouldnt this lead to long term financial instability?
The stability comes from having large stocks of currencies in defined places; banks are simply operating on a different order of magnitude than we are, which means we don't see much of the "global instability" that is actually occurring. World banks basically absorb all the losses and gains on that magnitude, regional banks below that, and we're fighting over the scraps that are too small for them to worry about.
The overall scheme will not change. The medium of the scheme will.