Which Coherent Corner? An Options Appraisal for Europe's Stablecoin Choice

Allan Pedersen

No 3, Philosophers Mint Working Papers from Philosophers Mint

Abstract: Europe's 2026 review of MiCA is usually framed as one choice for the euro stablecoin. The real question is the mix. A trilemma (par stability, private credit, no public backstop) lets a single token hold only two of the three; the corner that reaches for all three is structurally unstable, for reasons of coordination that no calibration fixes. But at the level of the system the three coherent designs are not rivals: they are lanes that can run in parallel, narrow money (a privately issued claim on the central bank), bank money (bank-issued tokens and tokenised deposits), and a public anchor (a digital euro and on-chain central-bank money). This note weighs each against six EU objectives, shows that the best mix turns on which objectives are prioritised, and offers a conditional sequenced portfolio, with one unconditional conclusion: close the incoherent non-bank corner.

Keywords: stablecoins; e-money tokens; MiCA; narrow banking; central bank digital currency; tokenised deposits; monetary sovereignty; disintermediation (search for similar items in EconPapers)
JEL-codes: E42 E58 G21 G28 (search for similar items in EconPapers)
Date: 2026-06
Note: Also available as SSRN 10.2139/ssrn.6917879; a SUERF Policy Note version is forthcoming.
References: Add references at CitEc
Citations:

Downloads: (external link)
https://philosophersmint.com/papers/which-coherent ... herent-corner-wp.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pmt:wpaper:3

DOI: 10.2139/ssrn.6917879

Access Statistics for this paper

More papers in Philosophers Mint Working Papers from Philosophers Mint
Bibliographic data for series maintained by Allan Pedersen ().