The Euro’s Quiet Expansion
Follow the credit.
For years, the debate about the international monetary system has been reduced to one question: when will the dollar lose its dominant position?
It is an attractive question because it produces dramatic headlines. It is also the wrong place to begin.
Currencies do not become globally important only because central banks hold them as reserves. They become important because companies borrow in them, banks lend in them, investors buy securities denominated in them, governments issue debt in them, exporters invoice in them and markets trust that liquidity will remain available during a crisis.
The latest data from the Bank for International Settlements reveal a development that deserves more attention than another abstract debate about de-dollarisation: the euro is quietly expanding as a currency of international credit.
This does not mean the dollar is being displaced. It does not mean Europe has solved its growth problem. And it does not prove that the euro has become a fully developed global safe asset.
It means something more precise and, in some ways, more interesting.
Borrowers and investors are using the euro more frequently to finance activity outside the euro area. That is a measurable change in the plumbing of global finance. If it persists, it will affect funding costs, currency mismatches, capital flows, European financial power and the transmission of monetary policy far beyond the eurozone.
The number that changed the argument
At the end of June 2026, global cross-border bank credit reached $40.7 trillion, according to the BIS. It was growing at an annual rate of 11%.