IDEAS home Printed from https://ideas.repec.org/p/pmt/wpaper/2.html

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

Author

Listed:
  • Allan Pedersen

Abstract

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.

Suggested Citation

  • Allan Pedersen, 2026. "Money or Credit? MiCA's Stablecoin Hybrid and the Direction of the 2026 Review," Philosophers Mint Working Papers 2, Philosophers Mint.
    • Handle: RePEc:pmt:wpaper:2
    DOI: 10.2139/ssrn.6917858
    Note: Also available as SSRN 10.2139/ssrn.6917858 and as SUERF Policy Note No. 411 (2026), https://www.suerf.org/publications/suerf-policy-notes-and-briefs/money-or-micas-stablecoin-hybrid-and-the-direction-of-the-2026-review-credit/.
    as

    Download full text from publisher

    File URL: https://philosophersmint.com/papers/money-or-credit/money-or-credit-wp.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.2139/ssrn.6917858?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Kenechukwu E. Anadu & Pablo D. Azar & Catherine Huang & Marco Cipriani & Thomas M. Eisenbach & Gabriele La Spada & Mattia Landoni & Marco Macchiavelli & Antoine Malfroy-Camine & J. Christina Wang, 2023. "Runs and Flights to Safety: Are Stablecoins the New Money Market Funds?," Supervisory Research and Analysis Working Papers SRA 23-02, Federal Reserve Bank of Boston, revised 26 Mar 2024.
    2. Pythagoras Petratos & Brian Baugus, 2025. "Free Banking Stablecoins," Economies, MDPI, vol. 13(11), pages 1-29, November.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wenbin Wu & Can Liu, 2026. "Stability Anchors and Risk Amplifiers: Tail Spillovers Across Stablecoin Designs," Papers 2602.18820, arXiv.org.
    2. Kenechukwu E. Anadu & Patrick E. McCabe & JP Perez-Sangimino & Nathan Swem, 2026. "A Framework for Understanding the Vulnerabilities of New Money-Like Products," Supervisory Research and Analysis Working Papers SRA 26-01 (revised), Federal Reserve Bank of Boston.
    3. Pietro Saggese & Michael Sigmund & Burkhard Raunig & Esther Segalla & Bernhard Haslhofer & Christos A. Makridis, 2026. "Stablecoins under Stress in a National Economy: Transaction-Level Evidence from Austrian Crypto-Asset Service Providers," CESifo Working Paper Series 12823, CESifo.
    4. Benedetti, Hugo & Nikbakht, Ehsan & Pastén-Henríquez, Boris, 2026. "Quantile-based connectedness in the crypto-stablecoin network across market conditions," International Review of Economics & Finance, Elsevier, vol. 106(C).
    5. Jacewitz, Stefan & Pogach, Jonathan & Unal, Haluk & Wu, Chengjun, 2025. "The regulatory dialectic in bank-sponsored money market funds," Journal of Financial Stability, Elsevier, vol. 80(C).
    6. Ferrari Minesso, Massimo & Siena, Daniele, 2026. "Private money and public debt. U.S. Stablecoins and the global safe asset channel," Working Paper Series 3174, European Central Bank.
    7. Michael Junho Lee & Donny Tou, 2026. "Stablecoin Disintermediation," Staff Reports 1185, Federal Reserve Bank of New York.
    8. Altavilla, Carlo & Boucinha, Miguel & Burlon, Lorenzo & Adalid, Ramon & Fortes, Roberta & Maruhn, Franziska, 2026. "Stablecoins and Monetary Policy Transmission," CEPR Discussion Papers 21321, Centre for Economic Policy Research.
    9. Kenechukwu E. Anadu & John Levin & Lina Lu & Antoine Malfroy-Camine & Nico Oefele, 2025. "Are retail prime money market fund investors increasingly more sensitive to stress events?," Supervisory Research and Analysis Notes, Federal Reserve Bank of Boston, issue 2025-01, pages 1-15, January.
    10. Elizabeth C. Klee & Arazi Lubis & Chase Ross & Sharon Y. Ross & Alexandros Vardoulakis, 2026. "The Fragility of Perfectly Safe Digital Money," Finance and Economics Discussion Series 2026-037, Board of Governors of the Federal Reserve System (U.S.).
    11. Barthélemy, Jean & Gardin, Paul & Nguyen, Benoit, 2026. "Stablecoins and short-term funding markets," Journal of International Money and Finance, Elsevier, vol. 161(C).
    12. Michael Junho Lee, 2026. "Composable Finance," Staff Reports 1177, Federal Reserve Bank of New York.
    13. Papa Ousseynou Diop, 2024. "An Econometric and Time Series Analysis of the USTC Depeg’s Impact on the LUNA Classic Price Crash During Spring 2022’s Crypto Market Turmoil," Commodities, MDPI, vol. 3(4), pages 1-29, December.
    14. Oefele, Nico & Baur, Dirk G. & Smales, Lee A., 2024. "Are stablecoins the money market mutual funds of the future?," Journal of Empirical Finance, Elsevier, vol. 79(C).
    15. Greitens, Jan, 2026. "Monetary anchors in a digital age: A historical perspective on the ECB's digital euro and US stablecoins," IBF Paper Series 02-26, IBF – Institut für Bank- und Finanzgeschichte / Institute for Banking and Financial History, Frankfurt am Main.
    16. Aldasoro, Iñaki & Cornelli, Giulio & Ferrari Minesso, Massimo & Gambacorta, Leonardo & Habib, Maurizio Michael, 2025. "Stablecoins, money market funds and monetary policy," Economics Letters, Elsevier, vol. 247(C).

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Systems; Standards; Regimes; Government and the Monetary System
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pmt:wpaper:2. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Allan Pedersen (email available below). General contact details of provider: https://philosophersmint.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.