Why is USD the societal “standard” for currency?


I understand the United States’ role in the global economy, with the Intranet origin being a US Govt. project. But still, why is this the standard? Is it just culture being the answer?

(100% willing to accept DMs that are not ELI5ed)

In: 3

If a price is not in your own currency, you have to calculate with the exchange rate, how much it is in your country.

Some people can do this simple math, some cannot.

So it is most convinient for all to use the currency of thouse, that cannot do the simple math, so everyone can still understand the price.

If you’re talking about websites, they check your IP/location and show the proper currency. Not sure what you mean by USD being “standard”.

As a European I rarely see anything in USD.

Basically after WWII when most of the gold reserves were fucked up, the USD was the only stable currency and flooded European markets. Rather than sort out who’s gold was where, the west pegged their currency on the USD, which until the 70s was pegged on the gold standard.

By the 90s the west+US was about half of not more than half of the entire world economy, so it was easier for even rivals of the US to use the USD.

Two reasons, mainly:

1. The US is big and old and powerful so people are broadly confident that the value of the dollar isn’t going to have wild fluctuations.

2. Petrodollar recycling. When the US buys oil, it pays in dollars, which means that whoever they just bought that oil from now has to buy things from people who take US dollars. This ought to apply to other currencies as well but kinda doesn’t for weird Henry Kissinger-related reasons, so the dollar is what’s getting handled in large quantities even by non-American governments. Who knows, maybe that’ll change as China does more belt and road stuff.

Well it may not always be. The reasons why are a bit complex but to get to the meat and potatoes it goes back to the English empire. This spread the English language across the earth to where it is now as almost a universal language. Most any nation of economic importance will see a shocking number of English speakers even in ones where that isn’t the every day language. This is a strong benefit to native English speakers such as seen in the USA. Further during the world wars the USA played a massive support roll economically in the beginning of both intertwining it’s own dollar into the different nations of Europe. For those keeping track, that is effectively every nation with modern technology at the time. The USA also has strong trade ties to China, in an attempt to combat the communism seen there, which the main manufacturing nation on the planet. These factors spread the use of the USA dollar just as much as the English spread their language. Understand I way simplified this and this explanation is missing a lot of info and to properly address those missing points would take quite the history lesson.

As for why the USA dollar may no longer be the reserve currency of the world, it again has to do with China and policy in the USA. The USA has recently largely inflated its dollar making confidence in it decline. China has economic ties to many nations and not just the USA making it possible that their currency may, in time, be found preferable to the USA currency. Understand the currency people use is all about how many obstacles to trade it creates. Many will accept the USA dollar but probably won’t accept the currency of some random nation, say the Egyptian pound for example, because others don’t accept it as is. If you don’t have to swap between 100 different currencies for international trade why would you?