The euro has remained unchallenged as the second most used currency globally after the US dollar since its introduction 20 years ago, but its usage declined after the global financial crisis, bottoming out in 2016.

That’s according to a report published on Tuesday by the European Central Bank (ECB) on the international role of the euro.

The euro is now used as the main currency of denomination globally for green bond issuance.

Global green bond issuance grew to $205 billion in 2019, with almost half of it denominated in euros.

“The share of the euro across various indicators of international currency use averaged around 19% – close to historical lows,” said the report.

“The euro remained unchallenged as the second most important currency in the international monetary system.”

The report added: “The international role of the euro is primarily supported by a deeper and more complete Economic and Monetary Union (EMU), including advancing the capital markets union, in the context of the pursuit of sound economic policies in the euro area.”

ECB President Christine Lagarde said: “The recent COVID-19 pandemic underlines the urgency of these policies and reform efforts, which are paramount to raising the attractiveness of the euro globally.”

The euro accounted for 20.5% of global foreign exchange reserves at the end of 2019, up from 20.3% a year earlier.

The euro’s share in outstanding international debt securities slipped to 22.1% from 22.4%.

The report contains a section on the role of the euro in global green bond markets.

“The swift implementation of an EU taxonomy of sustainable economic activities would provide a credible and standardised framework, ensure greater investor confidence and could thereby also contribute to strengthening the international role of the euro”, said Fabio Panetta, member of the ECB’s Executive Board.

The report added: “Adjusting for exchange rate valuation effects, the share of the euro in outstanding international loans was 1 percentage point higher at the end of 2019 than at the end of 2018, at 15.4%.

“The share of the euro in outstanding international debt securities declined.

“The share of the euro in global foreign exchange reserves and in outstanding international deposits remained broadly stable, as did the share of the euro as an invoicing currency for extra-euro area transactions in goods and the stock of euro banknotes circulating outside the euro area.”