The international use of the euro will increase slightly in 2025, but it will still be far less than the US dollar, which highlights the difficulty of challenging the US dollar's hegemony on a global scale. The European Central Bank's annual assessment report released on Tuesday showed that the overall use of the euro rose to about 20%. Its proportion in foreign exchange reserves remains unchanged, still only about one-third of the US dollar.
Euro-denominated international bond issuance hit a record high, the European Central Bank said, with the euro taking a leading role in global green and sustainable bond markets for the first time. But it also found that the use of the euro in daily foreign exchange transactions has decreased significantly.
Since Donald Trump returned to the White House, European officials have tried to undermine the dollar's international dominance as his erratic policymaking and attacks on the Federal Reserve have shaken global confidence in the United States.
European Central Bank President Christine Lagarde has even talked about a potential "global euro moment", urging politicians to elevate the euro's status so that it can enjoy more of the privileges of the dollar, including lower borrowing costs.
"The euro has an opportunity to increase its international appeal - if European policymakers create the necessary conditions and translate words into action," Lagarde wrote in a report on Tuesday. Economic resilience, legal and institutional soundness, and geopolitical reliability must be strengthened, she said.
However, the report also demonstrates the scale of the task.
One problem is that as the geopolitical situation continues to be tense, central banks of various countries continue to increase their gold reserves. Although gold purchases have dropped to about 850 tons from more than 1,000 tons in 2024, gold remains the world's second-largest reserve asset based on market prices.
