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

Author

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  • Allan Pedersen

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.

Suggested Citation

  • Allan Pedersen, 2026. "Which Coherent Corner? An Options Appraisal for Europe's Stablecoin Choice," Philosophers Mint Working Papers 3, Philosophers Mint.
    • Handle: RePEc:pmt:wpaper:3
    DOI: 10.2139/ssrn.6917879
    Note: Also available as SSRN 10.2139/ssrn.6917879; a SUERF Policy Note version is forthcoming.
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    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

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