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The euro as a global currency: a payments perspective

Author

Listed:
  • Furtuna, Oana
  • Papsdorf, Patrick
  • Polo Friz, Livia
  • Testi, Sara

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

Suggested Citation

  • Furtuna, Oana & Papsdorf, Patrick & Polo Friz, Livia & Testi, Sara, 2024. "The euro as a global currency: a payments perspective," Economic Bulletin Boxes, European Central Bank, vol. 2.
    • Handle: RePEc:ecb:ecbbox:2024:0002:7
    Note: 2566570
    as

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    More about this item

    Keywords

    euro-denominated payments; payment systems; Swift; T2; TARGET2;
    All these keywords.

    JEL classification:

    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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