The share of the US dollar in global foreign exchange reserves has decreased to 56%, its lowest level in the past 30 years. At the start of the 2000s, it was over 70%. Central banks are gradually looking for alternatives, with the European Central Bank (ECB) viewing this as a historic opportunity for the euro.
In May 2025, ECB President Christine Lagarde stated in Berlin that the global order is changing and the dollar is no longer unshakable. However, for the euro to become a true global reserve currency, several structural challenges must be addressed.
The main obstacles include the fragmentation of European capital markets, internal trade barriers, and geopolitical reliability. European markets lack the scale and liquidity of their US counterparts, and most savings are placed in deposits rather than equities or venture capital.
Internal EU barriers for goods are equivalent to tariffs of up to 45% and for services over 100%. These hinder economic growth and the development of quality financial instruments for reserve investment.
Moreover, the euro’s stability depends on European geopolitical reliability. Central banks worldwide prefer currencies of countries that can guarantee obligations and defense. Re-arming Europe and launching the digital euro could increase trust in the euro.
Projections show that by the mid-2030s, the dollar’s share may fall to 52%, the euro could rise to 25%, and the yuan could triple its share. Whether Europe will become a global economic leader depends on its ability to implement reforms in the coming years.
