Euros circulating outside the eurozone could be imposing costs on foreign users of the banknotes, but the effect is small relative to the popularity of euros as a global currency, according to research published by the Bank of Italy.

Authors Alessandro Calza and Andrea Zaghini examine the effective 'tax' imposed by inflation in their paper, Shoe-leather costs in the euro area and the foreign demand for euro banknotes.

They note the tax on monetary balances implied by expected inflation is