##achma in the kingdoms of the hellenistic period, to the guilder during the heyday of the dutch trading empire, to sterling in the 19th century and the dollar over the past half century until today, trade and international currency use went hand in hand : the larger the importance of a country or currency area in world trade, the greater the international importance of its currency. given europe ’ s role as the world ’ s largest trader, it is not surprising that the share of the euro in the invoicing and settlement of the euro area ’ s trade with the rest of the world has increased significantly. the latest numbers collected by the eurosystem show that most euro area countries conduct more than half of their trade with partners outside the euro area in euro. what is more striking is that trade taking place entirely outside the euro area – for instance, between eu countries that have not yet adopted the euro as well as between countries seeking to accede to the eu – is also being invoiced and settled in euro. as these developments cannot be fully explained by increasing trade linkages of these countries with the euro area, it would appear that the euro has started to become a vehicle currency in international trade. that said, recent ecb research on this issue has also shown that the euro does not display one of the characteristics typically associated with vehicle currencies – namely their use in the trade of commodities. an international currency is not only used for trade purposes, but also for financing and investment purposes. and also in this respect, we observe wider use of the euro in international financial markets. for example, over the past seven years, the share of the euro in the stock of international debt if we include the countries of the cfa franc zone in western africa, this number rises to 40 countries which the imf classifies as having exchange rate regimes that either use the euro as sole reference currency or as part of a currency basket. securities gradually rose from 19 % to slightly below 32 %. other market segments – for example the spot foreign exchange market – are characterised by a high degree of stability, possibly reflecting the importance of network externalities. however, market data ( from the continuous linked settlement system ) show that the euro is the second most widely used currency, accounting on average for almost 22 % of all daily transactions. the increase in the use of the euro as a financing currency in international bond markets, has been a key feature of its international role. a geographical breakdown of the outstanding stock

made the situation worse was the fact that borrowers were not even aware of such high interest rate or charges before taking the loan as these were not disclosed upfront, there was no interface except the mobile app to raise their grievances and the recovery practices were harsh and unorthodox. we had also observed that right from credit underwriting to recovery, every activity was being outsourced with scant regard to customer privacy and protection. digital lending was operating on a'rent an re'model, where the fintech platform was undertaking all the lending activities on behalf of the regulated entity by posing itself as principal. in many cases, the customers were not even aware of the name of the bank or nbfc which had sanctioned the loan. to tackle this issue, the regulatory stance has converged on regulating the digital lending activity and the arrangements between regulated entities and fintechs providing specified services to res ( which were rechristened as lending service proivers or lsps ). rbi's digital lending regulations have laid down a broad regulatory framework under which fintechs can become enabling partners with regulated entities. these guidelines are a mix of reiteration of the extant guidelines like reporting to cics, 3 / 7 bis - central bankers'speeches conducting due diligence before engaging lsps, etc. and some fresh ones, with res being the fulcrum around which digital lending activities are required to operate with the regulatory compliance being made their responsibility. the social media transition social media has revolutionized the speed and scope of dissemination of information. information sharing has never been so quick and unhindered thus far. but this also means that unsubstantiated rumors and false news can also spread equally quickly and can adversely affect financial institutions, especially banks. the recent banking turmoil in usa has jolted some of the widely held views regarding principles of liquidity management and nature and speed of bank runs. the banking turmoil in the united states and europe in early march 2023 has had a significant impact on the global financial system. this episode has highlighted the need for a reassessment of global standards in financial sector regulations. this episode has offered two important lessons : first, the trust is vulnerable to perceptions of weaknesses and misinformed social media commentary. second, that in an age of social media and internet banking, the speed with which bank runs occur is unprecedented and therefore, the response time to handle any such crisis has telescoped to a