The Euro: Chasing the Dollar’s Premium and Reserve Status
Explore how the euro aims to challenge the US dollar's reserve status and capture the convenience yield that reduces borrowing costs in global finance.
Miglior citazione da The Euro: Chasing the Dollar’s Premium and Reserve Status
The euro's journey to becoming a dominant global reserve currency is no longer just an academic debate—it is a strategic necessity for Europe's economic future. By increasing its global appeal, Europe can directly lower its borrowing costs, saving billions that can be reinvested into innovation, defense, and the green transition.
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An analysis of how Europe can promote the euro to achieve lower borrowing costs through global reserve status competition, comparing the euro's international role to the U.S. dollar and exploring strategies for increasing its global attractiveness.
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The convenience yield is a non-pecuniary benefit enjoyed by issuers of a dominant reserve currency, such as the United States. It allows the issuer to borrow at significantly reduced costs because global investors are willing to pay a premium to hold that specific debt. In 2025, this resulted in an extra yield of approximately 190 basis points on US Treasuries, representing a major financial advantage in the global market.
The US dollar currently holds the top position, appearing in nearly 90% of over-the-counter foreign exchange transactions and making up 57% of global reserves. The euro is the world’s second most important currency, maintaining a share of global use around 20%. While it remains a distant second, there is steady momentum as Europe seeks to challenge the dollar's supremacy to secure better economic benefits.
Achieving a higher reserve status would allow the euro to capture the dollar's premium, potentially saving European governments billions of euros in interest payments. By increasing its share in global finance, the euro can lower domestic interest rates and create a more resilient financial system. This shift would move the European economy toward the lower 'difficulty setting' currently enjoyed by the United States in international markets.
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"Instead of endless scrolling, I just hit play on BeFreed. It saves me so much time."
"I never knew where to start with nonfiction—BeFreed’s book lists turned into podcasts gave me a clear path."
"Perfect balance between learning and entertainment. Finished ‘Thinking, Fast and Slow’ on my commute this week."
"Crazy how much I learned while walking the dog. BeFreed = small habits → big gains."
"Reading used to feel like a chore. Now it’s just part of my lifestyle."
"Feels effortless compared to reading. I’ve finished 6 books this month already."
"BeFreed turned my guilty doomscrolling into something that feels productive and inspiring."
"BeFreed turned my commute into learning time. 20-min podcasts are perfect for finishing books I never had time for."
"BeFreed replaced my podcast queue. Imagine Spotify for books — that’s it. 🙌"
"It is great for me to learn something from the book without reading it."
"The themed book list podcasts help me connect ideas across authors—like a guided audio journey."
"Makes me feel smarter every time before going to work"
"Instead of endless scrolling, I just hit play on BeFreed. It saves me so much time."
"I never knew where to start with nonfiction—BeFreed’s book lists turned into podcasts gave me a clear path."
"Perfect balance between learning and entertainment. Finished ‘Thinking, Fast and Slow’ on my commute this week."
"Crazy how much I learned while walking the dog. BeFreed = small habits → big gains."
"Reading used to feel like a chore. Now it’s just part of my lifestyle."
"Feels effortless compared to reading. I’ve finished 6 books this month already."
"BeFreed turned my guilty doomscrolling into something that feels productive and inspiring."
"BeFreed turned my commute into learning time. 20-min podcasts are perfect for finishing books I never had time for."
"BeFreed replaced my podcast queue. Imagine Spotify for books — that’s it. 🙌"
"It is great for me to learn something from the book without reading it."
"The themed book list podcasts help me connect ideas across authors—like a guided audio journey."
"Makes me feel smarter every time before going to work"
"Instead of endless scrolling, I just hit play on BeFreed. It saves me so much time."
"I never knew where to start with nonfiction—BeFreed’s book lists turned into podcasts gave me a clear path."
"Perfect balance between learning and entertainment. Finished ‘Thinking, Fast and Slow’ on my commute this week."
"Crazy how much I learned while walking the dog. BeFreed = small habits → big gains."
"Reading used to feel like a chore. Now it’s just part of my lifestyle."
"Feels effortless compared to reading. I’ve finished 6 books this month already."
"BeFreed turned my guilty doomscrolling into something that feels productive and inspiring."
"BeFreed turned my commute into learning time. 20-min podcasts are perfect for finishing books I never had time for."
"BeFreed replaced my podcast queue. Imagine Spotify for books — that’s it. 🙌"
"It is great for me to learn something from the book without reading it."
"The themed book list podcasts help me connect ideas across authors—like a guided audio journey."
"Makes me feel smarter every time before going to work"
