The US dollar is the official currency for any Import or Export all over the world ,but How did it all started ?
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Short version: During the World Wars the U.S. made so much money selling weapons to the allies that they essentially had all the world’s gold (since their money was backed by gold) allowing the U.S. to still be on the gold standard while other countries had abandoned it. So, the easiest way for them to stabilize their own money was to peg it to the U.S. dollar, which was in turn pegged to gold and thus stable. Eventually the other countries took their gold back this was less literally true and the U.S. eventually went off the gold standard itself, but the system stayed in place basically by inertia.
When country A wants to import goods from country B, they can use country B’s currency to do so. In order to have a supply of country B’s currency to trade, country B must also be importing goods from country A. However, this only works when the imports/exports between country A and B are exactly equal and as you might imagine that is never the case. One of the countries will inevitably run out of supply of the other’s currency.
Thus there is a global need for an intermediary currency which holds equal value for both countries. For many hundreds of years that currency was gold. As the value of trade grew and grew as technology progressed it eventually far outstripped the global supplies and quantities of gold and other precious metals, so an alternative was needed.
That alternative was the US Dollar. Technically, USD became that currency even before gold was ousted because the value of USD was once directly pegged to that of gold, so countries often used USD as a placeholder for gold when trading. It continued even after that relationship was broken because A) America has a juggernaut of an economy, then worth up to 50% of global GDP and even today it is about 25% of global GDP, thus nearly every country in the world already does significant levels of trade with the US. Also, B) A more viable alternative doesn’t exist. USD has a predictable and trustworthy value and a vast supply available for everyone to use.
Prior to industrialization, before the 1800s, there was very little international trade (trade between countries). So a country pretty much had 2 options.
1) Produce what it consumed
2) Conquer lands (near or far) and take a part of their production, ie conquest and colonization.
Both options were not super effective since it was infeasible to ship lots of stuff long distances (technology didn’t exist). So really only things that were valuable and light like spices, tea and coffee could be transported great distances.
As industrialization developed in the 1800s (centered around Europe and the UK specifically), societies began, almost for the first time in human history, to produce excess goods consistently. And excess goods means they can be traded. But production and consumption remained fairly local and were still governed by how many people you had.
By the early 1900s the richest and most powerful countries either had very large production and population bases domestically (US, China, Russia) or had an empire (UK) or wanted to build an empire (eg Japan, Germany). Then the world wars happened. These two events (very ELI5) very much destroyed the production infrastructure in Europe, Japan and China. The US was pretty much the only major country with an intact production base.
Global trade is “new” historically speaking as it really did not grow rapidly until after WW2. The US was the dominant producer and consumer AND it had a great power rival called the USSR. Fundamentally different from the USSR, the US used a larger carrot and smaller stick approach. Instead of vassal states, the US fostered a global trade agenda. Basically any country could trade with the US and among themselves and the US provided security and financial guarantees. Since the US allowed (almost) anyone to sell into the US, most countries accumulated reserves of US dollars (if you sell to the US, you get USD for your goods).
The US did not do this because they were generous (although in a sense, they were) but because it wanted to have allies against the USSR. If you traded in USD and wanted to sell to the US market, it was clear that being friends with the US was a good idea. And the US allowed themselves to become the export market of choice (ie they ran trade deficits with all other countries)
It thus became somewhat natural that people in different countries used USD to trade even among themselves. Given the availability of USD and the security/financial stability of the US, their money was (and still is) widely accepted as a store of value.
(Short commentary on global trade)
Trade can only occur in a big way with financial intermediaries like banks. Banks played that trusted middle person role. If you were a seller, you couldn’t risk sending goods without some guarantee of payment and if you were a buyer, you couldn’t risk sending money when the goods are located halfway around the world (most trade happens by sea and it could take weeks/months to settle) And banks had lots of USD so it became very easy for banks to cooperate and denominate trade in USD. Buyers and sellers could agree on price in a stable and trusted currency which the banks could trade among themselves.
Banks could easily “move” dollars from an account in one country to another account in another country since banks all had dollar accounts between themselves. All it needed were ledger transactions, actual physical money didn’t move – just numbers on their accounts between themselves (ie bank A has a dollar account in bank B and vice versa). This is how the modern banking system work – a system of trusted accounts between themselves.
Banks mostly communicate their international money transactions on a platform called SWIFT which is why it became a big deal when the US barred Russian banks from the SWIFT system in 2022. If a bank didn’t have SWIFT access, they couldn’t easily move money between bank accounts in different countries.
Long and short of it (and this is a HUGELY compressed summary), the USD became dominant in global trade since WW2.
All the other posts here have good explanations of why the dollar is so widely used for trade. However it’s worth pointing out a flaw in your premise: the US dollar isn’t the “official currency for any import or export”.
There are quite a lot of commodities – particularly oil – that are traded almost entirely in dollars, and I think that gives people a misleading impression. Actually the dollar doesn’t even seem to be used for the *majority* of international trade, let alone all of it.
For example, last year, 40% of international payments via the SWIFT system were in dollars. That was only just ahead of euro payments. Back in the early 2010s, there were actually more payments in euros. Looking at invoicing the figures are similar, looking at actual payments the USD is under 10%, with over 50% in “other” currencies. (Although there are big problems with the data quality for the latter two, eg. there’s very little data for China(!).)
The reason for why the euro is used so much is pretty obvious when you think about it. Imagine I live in German and I want to sell to France. Or I live in Northern France and my nearest supermarket is in Belgium. Am I going to use dollars? Obviously not, I’ll use euros.
The EU is the largest cluster of rich countries in the world and they’re the most integrated economies in the world, so there’s a *lot* of trade between EU countries. So you might consider the statistics to be a little misleading (you might see this trade as closer to trade between US states, for example). However even outside of the EU there’s lots of trade being conducted in currencies other than the dollar.
(For anyone interested, [here’s](https://www.imf.org/en/Publications/WP/Issues/2023/03/24/Currency-Usage-for-Cross-Border-Payments-531324) a source on currency usage, drawing on SWIFT data and [here’s](https://www.imf.org/en/Publications/WP/Issues/2020/07/17/Patterns-in-Invoicing-Currency-in-Global-Trade-49574) one on invoicing.)
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