The UAE is considering moving away from the US dollar to the Chinese yuan amid rising regional tensions and economic instability, challenging traditional alliances.
The EUR absolutelly is - the EU is a big stable open economy with large Financial Markets a freely trading currency and deep Treasuries markets.
It’s not by chance that over the last 2 decades mainly the EUR has taken a bigger and bigger slice of foreign exchange reserves away from the USD, with by 2025 the EUR being roughly 1/3 the amount of USD reserves (see here).
(That said, looking at that data, the EUR and USD foreign currency reserves have barelly moved since 2017)
Agree on the RNB not being ready - China’s currency isn’t freely traded and neither are their treasuries, and access to mainland Financial Markets is highly restricted. That’s reflected on the above mentioned foreign exchange reserves where the RNB is but 1/10 of the EUR reserves.
A single liquid equity market. All EU equity markets when combined don’t even add up to a single mag 7 stock when it comes to market value.
An EU sovereign bond
As someone who actively invests in both continents and has lived half his life on each, I can tell you that the Euro has extremely meagre investment options compared to the US. No one will standardize on a reserve currency with such a lack of investment options .
Which is not to say the EU couldn’t fix this and step up to the plate. With Bretton-Woods collapsing, it might soon be time for this, but the EU is still quite timid when it comes to doing anything that can invite the ire of the US.
Even if the EU did manage this, they would have to accept a massive strengthening of their currency which would choke off exports, for which Europe still counts on. They would have to deindustrialize much of the same way the US did and go to a services economy. There are a lot of powerful lobbies that wouldn’t go for this.
Which brings me to the final point. The US has 7 times the navel assets of Europe combined. If the EU really pissed the US off, the US could just blockade them until they cried mercy. Changing this would take absurd amounts of money and time.
The EUR absolutelly is - the EU is a big stable open economy with large Financial Markets a freely trading currency and deep Treasuries markets.
It’s not by chance that over the last 2 decades mainly the EUR has taken a bigger and bigger slice of foreign exchange reserves away from the USD, with by 2025 the EUR being roughly 1/3 the amount of USD reserves (see here).
(That said, looking at that data, the EUR and USD foreign currency reserves have barelly moved since 2017)
Agree on the RNB not being ready - China’s currency isn’t freely traded and neither are their treasuries, and access to mainland Financial Markets is highly restricted. That’s reflected on the above mentioned foreign exchange reserves where the RNB is but 1/10 of the EUR reserves.
The EUR lacks
As someone who actively invests in both continents and has lived half his life on each, I can tell you that the Euro has extremely meagre investment options compared to the US. No one will standardize on a reserve currency with such a lack of investment options .
Which is not to say the EU couldn’t fix this and step up to the plate. With Bretton-Woods collapsing, it might soon be time for this, but the EU is still quite timid when it comes to doing anything that can invite the ire of the US.
Even if the EU did manage this, they would have to accept a massive strengthening of their currency which would choke off exports, for which Europe still counts on. They would have to deindustrialize much of the same way the US did and go to a services economy. There are a lot of powerful lobbies that wouldn’t go for this.
Which brings me to the final point. The US has 7 times the navel assets of Europe combined. If the EU really pissed the US off, the US could just blockade them until they cried mercy. Changing this would take absurd amounts of money and time.