{"status":"ok","message-type":"work","message-version":"1.0.0","message":{"indexed":{"date-parts":[[2026,7,31]],"date-time":"2026-07-31T06:58:46Z","timestamp":1785481126742,"version":"3.56.0"},"posted":{"date-parts":[[2026]]},"group-title":"SSRN","reference-count":0,"publisher":"Elsevier BV","license":[{"start":{"date-parts":[[2026,1,1]],"date-time":"2026-01-01T00:00:00Z","timestamp":1767225600000},"content-version":"unspecified","delay-in-days":0,"URL":"https:\/\/www.uspto.gov\/ip-policy\/copyright-policy\/copyright-basics"}],"content-domain":{"domain":[],"crossmark-restriction":false},"short-container-title":[],"abstract":"<jats:p>Regulatory frameworks for stablecoins, including the reserve and liquidity requirements of the EU's Markets in Crypto-Assets Regulation (MiCA), implicitly rely on secondary-market depth to absorb redemption-driven selling during stress. We introduce Peg-Defending Depth (PDD)resting bid depth within six threshold bands below an asset's peg-and show that its displayed values are unreliable exactly when they matter. Using the complete Binance trade record for five major depeg episodes (USDC 2023, USDT 2023, TUSD 2024, FDUSD 2025, USDe 2025), we document that realized absorption density collapses by one to two orders of magnitude between shallow (25 bps) and deep (500 bps) thresholds in every failed defense, that price traversal accelerates with depth, and that the one successfully defended episode exhibits shallow absorption an order of magnitude denser than any failure. Deviations must be measured from an effective peg-assets such as FDUSD trade at persistent double-digit basispoint discounts in calm markets-and deep-threshold results are invariant to this choice while shallow ones are not. Tick-level best-quote data for the defended episode show displayed liquidity that strengthened and became more executable as stress grew, fixing the sign of our central hypothesis: failing defenses should exhibit rising phantom shares in displayed pegdefending depth. A live three-channel measurement design, extending the phantom-liquidity decomposition of Lim (2026), yields the calm-sample results reported here and registers this proposition as a falsifiable prediction for the next stress episode. The findings imply that supervisory reliance on observed order-book depth is mechanically fragile: displayed depth and executable depth diverge most under the conditions such monitoring exists to detect.<\/jats:p>","DOI":"10.2139\/ssrn.7126758","type":"posted-content","created":{"date-parts":[[2026,7,31]],"date-time":"2026-07-31T06:15:27Z","timestamp":1785478527000},"source":"Crossref","is-referenced-by-count":0,"title":["Displayed Depth Is Not Executable Depth: Peg-Defending Liquidity in Stablecoin Markets and the Limits of Depth-Based Supervision"],"prefix":"10.2139","author":[{"ORCID":"https:\/\/orcid.org\/0009-0005-8477-9393","authenticated-orcid":true,"given":"Boon Chuan","family":"Lim","sequence":"first","affiliation":[],"role":[{"vocabulary":"crossref","role":"author"}]}],"member":"78","container-title":[],"original-title":[],"deposited":{"date-parts":[[2026,7,31]],"date-time":"2026-07-31T06:15:28Z","timestamp":1785478528000},"score":1,"resource":{"primary":{"URL":"https:\/\/www.ssrn.com\/abstract=7126758"}},"subtitle":[],"short-title":[],"issued":{"date-parts":[[2026]]},"references-count":0,"URL":"https:\/\/doi.org\/10.2139\/ssrn.7126758","relation":{},"subject":[],"published":{"date-parts":[[2026]]},"subtype":"preprint"}}