The international role of the euro increased over the course of last year, the European Central Bank (ECB) said in its latest review of the European single currency published on Tuesday.
"Overall, based on a broad range of indicators, the international role of the euro grew moderately in 2025," it said, adding that the euro remained the second-most important currency in the international monetary system.
Among the indicators cited by the ECB is the issuance of international debt denominated in euro, "which reached record highs during the year" and was up around 30% compared with 2024.
"The euro also became the leading currency in the green and sustainable international bond market in 2025, surpassing the US dollar for the first time, with issuances totalling almost $100 billion (around €85 billion)," it said.
Foreign portfolio inflows to the euro area had approached historical highs in 2025, with net purchases exceeding €850 billion in 2025 and near peak levels since the creation of the euro, it said.
Overall, the international role of the euro grew, with its share across various indicators of global currency use reaching around 20%.
The ECB is aiming for the single currency to have a bigger role alongside the dollar, partly as a response to the policies of current US administration. It also hopes that loans in the European Union will be cheaper on the back of a strong euro.
Exchange rate fluctuations will have fewer consequences if more trade is conducted in euros, the ECB believes.
The ECB estimates global currency reserves at 57% for the dollar and 20% for the euro. The aggressive policies pursued by the Trump administration have put the dollar's status in doubt, it believes.
ECB President Lagarde has called for a greater international role for the euro.
The bank noted that central banks had increased their gold reserves and certain countries were promoting alternative payment systems.
While this provided an opportunity for the euro to boost its international attractiveness, EU decision-takers needed to create the necessary conditions, Lagarde said.
"In particular, completing the Single Market remains essential to unlocking Europe's full potential. Moreover, for the euro to evolve into a truly global international currency, the euro area must build scale and deeper, more liquid capital markets," she said in forward to Tuesday's report.
And Lagarde added that additional steps, like joint financing of public goods, would help establish a safe and liquid pool of EU public debt.
Joint EU debt remains a highly contested issue in the 21-member eurozone. Germany and other countries have agreed to this only in exceptional cases, such as for the pandemic reconstruction fund and for financing Ukraine in warding off the Russian invasion.
