I will be taking a Mediterranean cruise with friends in May. They say that tipping may be done in dollars, even on on shore excursions. I don't think Europeans want our devalued dollar. Shouldn't the tips on shore, at least, be done in local currency. How about aboard ship? Dollars?
Tipping in Europe isn't nearly as frequent and formalized as it is in the States. (Search the many threads on this site for more on tipping hints by country.) That said, my experience with cruises (all outside of Europe) is that they are made to separate you from your money. (Tips for the crew, tips for the shore party. Tips --and add-on fees--for all side trips and cultural events.) The cruise lines have a long list of vendors and providers who all live on tourist dollars. I'm sure they'll gladly accept any currency you're willing to give them.
Our experience with cruise tipping is that it is always in dollars and generally just added to the final bill. On shore we always tipped in local currency but have often see other travelers tip in dollars. A tip is a tip. Just be sure the amount is appropriate regardless of currency.
I would tip in the local currency on shore (unless you are on a shore excursion with cruise ship personnel).
If you tip in dollars, whoever receives your tip is going to have to take that to an exchange or bank and change it into local currency, at some cost and inconvenience. It seems impolite to me.