Source: European Parliament
The dollar has been the dominant global currency and the anchor of the international monetary system for over 80 years. The euro, once seen as a legitimate contender for this role, has largely stagnated in second place. This paper explains recent policy and other developments that have reinvigorated the debate about global currency dominance and discusses the viability of the dollar’s continued dominance. It then explores different possible scenarios and policy gaps that would need to be addressed for the euro to play a more prominent international role.