What made the Deutsche Mark work as a secession tool was that the Bundesbank had no view on Montenegro. Indifference was the asset. Milošević could debase the dinar precisely because he cared who held it. A stablecoin issuer isn't indifferent: it can see wallets and freeze them individually, and it does. Adopting money whose issuer can act on you personally isn't secession from a sovereign, it's a change of sovereign.
Thanks for the comment! We might have to agree to disagree on this one. I would argue that the ECB has not been indifferent. It has publicly said it does not support unilateral euroization, and the issue has actually stood in the way of EU accession. Now…neither the Bundesbank nor the ECB took any action to stop Montenegro from using the euro, but with sanctions they could have. One more quick point, during COVID, the ECB created an emergency repo facility that the Central Bank of Montenegro was able to join, further demonstrating that the ECB was tracking the situation and had the capacity to act.
What made the Deutsche Mark work as a secession tool was that the Bundesbank had no view on Montenegro. Indifference was the asset. Milošević could debase the dinar precisely because he cared who held it. A stablecoin issuer isn't indifferent: it can see wallets and freeze them individually, and it does. Adopting money whose issuer can act on you personally isn't secession from a sovereign, it's a change of sovereign.
Thanks for the comment! We might have to agree to disagree on this one. I would argue that the ECB has not been indifferent. It has publicly said it does not support unilateral euroization, and the issue has actually stood in the way of EU accession. Now…neither the Bundesbank nor the ECB took any action to stop Montenegro from using the euro, but with sanctions they could have. One more quick point, during COVID, the ECB created an emergency repo facility that the Central Bank of Montenegro was able to join, further demonstrating that the ECB was tracking the situation and had the capacity to act.
Incredible title and equally fascinating piece!
Thank you so much, Zach!!