[WATCH] The Euro is a Vehicle Currency in Parts of Africa and a Digital Euro Could Strengthen its Global Appeal, Says Latest European Central Bank Report

The European Central Bank (ECB) has published a report showing the global appeal of the Euro and why a Euro central bank digital currency (CBDC) could contribute to its strength.

The report highlighted where the Euro is a vehicle currency globally, including Africa, showing its continued appeal for trade invoicing and as a reserve currency in these markets how introducing a CBDC would further increase it.


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The dataset covers a diverse sample of countries that include:

  • Europe – 40 countries
  • Asia – 20 countries
  • Africa – 22 countries
  • Latin America – 11 countries
  • Oceania – 4 countries
  • Middle East – 3 countries
  • North America – 2 countries

Overall, the countries in the dataset account for about 75% of global trade.

Interestingly, the report also revealed that the global appeal for both the US dollar and the Euro as vehicle currencies for global trade invoicing has significantly increased over time showing their continued appeal.

Currently, invoicing currency patterns in global trade, excluding intra-US and intra-Euro area transactions are:

  • US dollar – 50%
  • The Euro – 30%

It is estimated that between 30 – 50% of the value of Euro banknotes is held outside the Euro area.

According to the report:

“Non-euro area European countries and several African countries use the euro for invoicing of more than just their exports to the euro area.

So even though the US dollar is the globally dominant currency in trade invoicing, the euro may be regarded as a regionally dominant currency in Europe and some parts of Africa, including countries of the CFA franc zone.”

                      – May 2021 Report, The European Central Bank (ECB)

Discussing the impact of a CBDC issuance, the report states:

“The global appeal of currencies depends on fundamental economic forces which digitalisation is unlikely to alter. However, characteristics that are specific to digital means of payment, including:

    • Safety
    • Low transaction costs and
    • Bundling effects

could promote the international adoption of a currency. These features may combine to create positive feedback loops in the use of a currency as a means of payment and store of value and thus have effects on its global appeal.”

                  – The European Central Bank

The report admits that while a CBDC may support the use of the Euro in cross-border payments, it is not necessarily a game changer. However, ‘the specific design features of a CBDC would be important for its global outreach and, ultimately, the international role of the currency in which it is denominated.’


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