Which country is the smallest sovereign state to issue its own euro coins?

Vatican City is the smallest sovereign state to issue its own euro coins.

Vatican City uses the euro under a monetary agreement with the European Union and is permitted to mint euro coins bearing its own national designs. These coins are legal tender throughout the euro area, although Vatican issues are mainly collected because of their low mintages and changing papal imagery.

The first Vatican euro coins entered circulation in 2002, replacing the former Vatican lira. Coin designs have changed after the death or resignation of a pope, with later issues reflecting the sitting pontiff or the period of a vacant see.

Monaco, San Marino, and Andorra also issue national euro coins, but all three have considerably larger territories or populations. Vatican City’s special monetary arrangement is possible because of its close economic relationship with Italy and the European Union.