Ukraine is exploring whether to replace the U.S. dollar with the euro as its reference currency, as Kyiv aligns more closely with the EU and global trade fractures deepen.
Ukraine is weighing a potential shift away from the U.S. dollar and towards the euro as the reference currency for its hryvnia, reflecting the country’s increasing alignment with Europe and evolving global economic dynamics, according to central bank governor Andriy Pyshnyi.
Speaking to Reuters via email, Pyshnyi cited several factors behind the review, including Ukraine's bid for EU membership, the EU's growing role in Kyiv’s defence, and rising volatility in global markets. He noted that the ongoing fragmentation of global trade was further influencing the central bank’s considerations.
“This work is complex and requires high-quality, versatile preparation,” Pyshnyi said, in what are the most direct public remarks to date by a Ukrainian official on such a potential change.
The U.S. dollar continues to dominate international trade and global reserves, with many major economies — such as Saudi Arabia and Hong Kong — pegging their currencies to it. However, the dominance of the dollar has come under scrutiny as geopolitical shifts accelerate. Under President Donald Trump, the U.S. introduced significant tariffs, triggering concerns about the greenback’s long-term role as a global reserve currency.
The question of dollar reliability is particularly relevant for Ukraine, which is now in its fourth year of full-scale war with Russia. During Trump’s previous administration, military assistance to Kyiv was temporarily halted — a move that has informed Ukrainian policymakers' search for alternative economic and defence anchors.
While dollar-denominated transactions still dominate Ukraine’s foreign exchange markets, Pyshnyi noted a modest but steady rise in euro-based deals. He declined to provide further detail on the pace or scale of this transition.
The idea of currency realignment is not unique to Ukraine. Moldova, which began EU accession talks alongside Ukraine, adopted the euro as its reference currency on January 2. According to Phoenix Kalen, global head of emerging markets research at Societe Generale, Ukraine’s deliberation is part of a broader trend. “Its destiny is tied to Europe and European defence,” she said. “It makes sense for many reasons why they would want to consider this shift.”
Meanwhile, Ukraine recently secured a deal granting the U.S. preferential access to new mineral ventures in exchange for reconstruction funding. However, the dollar has fallen more than 9% against a basket of major currencies since Trump’s return to office, as investor confidence in U.S. assets wanes.
Despite this, Pyshnyi noted that military and strategic alliances have historically supported the dollar’s reserve status, and any movement away would need careful and prolonged adjustment.
Ukraine launched its current national currency, the hryvnia, in 1996. After Russia’s 2022 invasion, the central bank pegged it to the dollar at about 29 per USD. That peg was later loosened amid growing fiscal imbalances, and in October 2023, the bank adopted a managed exchange rate regime with the dollar as its reference point.
Ukraine's aspirations to join the EU continue, with European Commission President Ursula von der Leyen saying earlier this year that membership could be realistic by 2030, if reform efforts persist. Pyshnyi said that deeper integration with Europe could revive investment and consumer activity, leading to growth of 3.7–3.9% over the next two years.
Still, much hinges on the war’s trajectory. “A quick end to the war would clearly be a positive scenario,” Pyshnyi said, “but the economic benefits would likely take time to fully materialize.”
Ukraine remains heavily reliant on external financing, expecting $55 billion in support this year — sufficient to cover its budget deficit and establish a reserve. Projections for 2026 and 2027 are lower, at $17 billion and $15 billion, respectively.
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