This study describes emerging trends and possible shifts in the global monetary system. It assesses the likelihood of significant changes, including opening the space for additional global currencies, potentially leading to a situation where several national units share international currency status.

Currently, the dollar is far and away the leading global currency. It accounts for more than 60% of identified foreign exchange reserves and nearly 50% of global foreign exchange turnover. It is the currency of denomination for more than 60% of international debt and 50% of international loans. On all these dimensions, the international monetary role of the dollar far exceeds the weight of the United States (US) in the global economy. At the same time, the share of the euro is only a fraction of that of the US, although the US and euro area economies are of similar size.

In other words, although the euro is the second most important global currency, its share of global transactions does not exceed the weight of the euro area in the global economy (except in payments through SWIFT, where the euro and dollar are roughly coequal). Moreover, this role relies almost entirely on the importance of the euro area itself in global trade and transactions, with the euro little used in transactions in which the euro area itself is not one of the principals. The absence of the euro in “third country” transactions is especially pronounced in Asia. While the dollar also dominates in Latin America, the economic weight of this region is low compared with Asia, and its growth prospects are more limited.