The US dollar bill's standing as the world's favourite form of cash is being pushed aside by the five-year-old euro with the value of Euro notes in circulation totaling 614 billion compared to the equivalent 588 billion Euros in greenbacks.
The figures highlight the remarkable growth in Euro notes since their launch on January first 2002, three years after the start of Europe's monetary union, which in January welcomes its thirteenth member, Slovenia, the former Yugoslav republic. The news was confirmed by the European Central Bank spokesperson in Frankfort: "it's the first time the Euro overtakes the US dollar in total circulation" Although the ECB does not deliberately promote the international use of the euro, it has become popular in official foreign exchange reserves, even if it is far from challenging the dollar's lead as the most popular reserve currency. By the end of October the 759 billion of US dollar notes in circulation was only a fraction ahead of the value of Euro notes, converted at exchange rates at that time. But since October the Euro has risen strongly against the dollar and this month the value of Euro notes has risen to more than 614 billion Euros, or in excess of 800 billion US dollars at the latest exchange rates. ECB estimates that between 10 and 20% of the 600 billion Euro notes in circulation, are held outside the eurozone. Although the ECB does not deliberately promote the international use of the Euro, it has become popular in official foreign exchange reserves, even if it is far from challenging the dollar's lead as the most popular reserve currency. "After the launch, we expected growth to stabilize, but it has continued over five years" said Antti Heinonen, head of the European Central Bank's bank notes directorate. After the 2002 launch, the rate of increase slowed but has remained at or above 10% a year. The exact reasons are unclear; even central banks do not know where their notes are or for what purposes they are used. Several possible explanations are considered: within the eurozone, citizens may still be adjusting to the new currency. In terms of population, the eurozone, with a population of 315 million is larger than the US. Eurozone citizens like to hoard some cash, perhaps more than their US counterparts, especially if they have difficulty getting to an automated cash dispenser. Electronic payment systems remain far from universal in the eurozone while in the US "even newspapers are paid with credit cards". Overseas demand for euro notes is clearer to see. Tourists traveling outside the eurozone are more likely to take higher denomination Euro notes. The bills have also become popular in European Union member states that hope to one day to join the eurozone. Kosovo and Montenegro have adopted the Euro as their national currency, even though they are not yet EU members. In countries such as Russia and beyond, Euros have gained acceptance. Furthermore for political reasons countries such as Syria and Iran have changed to Euros. However, the US dollar remains as the favourite currency in financial deposits with a 66% participation, although the euro which begun in 1999 with 18% it has advanced to 24.3% currently.