Is the Euro becoming a global currency?

Recent comments on currency positions have intensified the discussion about the possibility of the euro becoming a global monetary base. This is due to the growing optimism towards this currency and the negativity towards the US dollar.

Analysts identify several conditions for a global currency. The euro, like the US dollar and the yen, meets the requirements for convertibility without capital controls, but does not meet other criteria such as the current account deficit required to secure foreign capital. In addition, the US dollar has a «deep and liquid asset pool,» while the euro does not create a fully integrated capital market.

Analysts point out that settlement systems such as SWIFT and CHIPS support the dollar's hegemony. Despite the problems of the United States with domestic institutions, they still show strong growth and liquidity indicators. 

Although the euro does not meet all the requirements, its importance is growing. The dollar accounts for 58% of foreign exchange reserves, the euro – 20%. The dollar is also involved in 50% of transactions via SWIFT, while the euro is involved in 22%.

Experts note that there is no prospect of replacing the dollar in the near future, but even small changes in its share can significantly affect the valuation of various assets.