The euro as a global currency: a payments perspective

Oana Furtuna, Patrick Papsdorf, Livia Polo Friz and Sara Testi

Economic Bulletin Boxes, 2024, vol. 2

Abstract: The global role of a currency can be measured in several ways, including by looking at its use in payments. After March 2023 the share of the euro in total Swift payment messages (i.e. payment instructions sent via the Swift network) appeared to drop. This coincided with a major infrastructure change in Europe – namely, the launch of the Eurosystem’s next-generation large-value payment system for the euro, T2, which replaced TARGET2 – and a move to a new Swift message standard. The associated technical changes have altered the ways in which banks make euro payments and manage euro liquidity, resulting in a break in the data on euro‑denominated Swift payment messages. In fact, the total value of euro payments settled in T2 has actually remained largely stable relative to figures for its predecessor, TARGET2, and so has the global reach of the payment system. This analysis shows the importance of accounting for technical factors when interpreting indicators based on payment traffic. JEL Classification: E42, F40, G21

Keywords: euro-denominated payments; payment systems; Swift; T2; TARGET2 (search for similar items in EconPapers)
Date: 2024-03
Note: 2566570
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