MNI BRIEF: Trump Crypto Support May Threaten Euro Intn'l Role

Washington's current initiatives to support the global use of cryptocurrencies, including the creation of a strategic bitcoin reserve and the facilitation of U.S. dollar-based stable coin issuance are new challenges that could threaten the status of the euro as a reserve currency, the European Central Bank said in its annual report on the international role of the euro published on Wednesday.

Against that, however, U.S. tariffs “have led to highly unusual cross-asset correlations” and could strengthen the global role of the single currency if European policymakers create the necessary conditions, including acceleration of the digital euro and improving cross-payment solutions, the ECB said.

In 2024, the international role of the euro remained stable around 19% of reserves, but the issuance of international loans and bonds denominated in euro was particularly dynamic, increasing over 40%. Spillovers from Russia's invasion of Ukraine and geopolitical developments  didn’t affect the euro's position.