Money or Credit? MiCA's Stablecoin Hybrid and the Direction of the 2026 Review

Are stablecoins a new kind of money, or a new kind of bank? Europe's Markets in Crypto-Assets Regulation (MiCA) has never quite decided. It treats a fiat-backed stablecoin (an e-money token) as a digital wrapper around existing money, yet loads the issuer with much of a bank's prudential machinery. The result is coherent in one case and unstable in another, depending on who issues it. A bank-issued token sits inside the public safety net, and the arrangement holds. A non-bank issuer faces the same bank-grade rules but no safety net: an instrument that promises to be worth one euro, invests in assets that can lose value, and has nothing to fall back on in a panic. Those three features cannot all hold at once. Reading the 2026 review consultation as a live document, the note finds three EU institutions pulling this corner three ways, and argues the review should choose one coherent design, not fine-tune an incoherent middle.