eli5 De Dollarization
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The vast majority of world trade is conducted in US dollars. Meaning like when goods travel from one country to another country, the seller almost always demands to be paid in dollars. Even if the US isn’t involved. Like when China sells goods to Nigeria, the Chinese expect to be paid in dollars. And when Brazil sells goods to Britain, the Brazilians expect to be paid in dollars.
The US dollar is just such a stable currency, and it’s backed by such a stable government, with such strong consistent demand behind it (because the US is the largest economy in the world), that it’s easiest and cheapest for most countries to just do business in dollars, rather than deal with the headaches of trying to trade with each other in their own currencies, whose values fluctuate and for which there is very low demand from any other country. For the most part, no international companies want to accept your Brazilian reals or Australian dollars as payment for goods, because they themselves will have a hard time finding *another* company willing to accept those reals or Australian dollars as payment for some later purchase.
But obviously not every country is happy about this. This all works to the benefit of the US, it subsidizes our economy at the cost of theirs. It makes our currency worth more and their currencies worth less, meaning it keeps inflation down for us, but worsens inflation for them. Therefore, many countries talk about working out trade deals where they might be able to start conducting business in other currencies that aren’t the US dollar. The most famous and successful example is the eurozone in the European Union, they conduct all their trade amongst themselves in euros, so they don’t have to use dollars. Other countries hope to create some kind of system like that where they can conduct trade in a different currency.
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