The Role Of US Dollar in Global Trade

[MFahad]

The global trade is becoming more independent and we don't have to see a number of people depending much on the use of Fiat currency when we are already going far in cryptocurrency and this has been a unique opportunity for every actors to make profits in their financial and business Enterprise, with time we will see how bitcoin could also be a mainstream the same way we use Fiat currency as a global coin for international trades and other purposes, even though this is already becoming a reality and we only needed more time to achieve a unified adoption rate to Bitcoin in serving all this purposes.

I would partially agree to this point that crypto-currency especially Bitcoin is becoming more important factor for international trades although bitcoin has changed the way of people thinking about investing money. However, I do not think so that it will replace the Fiat currency in near future because there are still many challenges to face like Government statutes or public policy price fluctuations and limitation of acceptance from many countries. the continuous development of blockchain technology and increasing awareness among peoples in world may help crypto-currency gain wider acceptance in the upcoming years. On the other hand I think in future both currency will serve side by side for there different purposes.

[bitgolden]

In a world where we are dealing with someone who is not from our country, we will always use USD as the benchmarket to calculate the value. I will switch that dollar to my fiat, and the other person will switch that dollar to theirs, and they will all calculate and we will see if it is a good deal or not that way.

I can't offer my fiat, they would not want it, and they won't offer their fiat because I will not take it. This is the reason why bitcoin ends up with being so much more important. Because it can replace dollar.

[slapper]

Oil is first priced in dollars because at a certain point in history enough of the world agreed to that standard. Then all others were forced to adapt or be left out of the market. Once a standard is established it is nearly impossible to change. The costs of replacement are spread across all equally. All the counterparties have to switch simultaneously. That almost never happens.

Gold same thing. Shipping contracts, the same thing. This is not some random selection that was made anew each year. A complex series of choices became entrenched in existing infrastructure, and the infrastructure now penetrates deeper than any one political will.

The loan thing, it is a real term for that, "original sin". The economists use to describe the trap where developing countries literally cannot borrow in their own currencies. Foreign investors will not be holding them for the long-term. So they issue dollar debt. And then when their local currency falls the debt burden grows. In local terms. While their revenues stayed local.

[CONVOAI]

Many countries are now trying to increase trade in alternative payment systems and their own currencies but it is not so easy to change the position of the USD quickly just by starting a few bilateral agreements or limited transactions. The influence of the dollar in international trade, banking systems, foreign exchange reserves and investment has been built up for many years. Therefore no matter how many alternative systems grow it will take time for them to be globally accepted. The monopoly of the dollar may decrease somewhat in the coming days but it still seems quite difficult to create an alternative to it in the short term.

[DrBeer]

In a world where we are dealing with someone who is not from our country, we will always use USD as the benchmarket to calculate the value. I will switch that dollar to my fiat, and the other person will switch that dollar to theirs, and they will all calculate and we will see if it is a good deal or not that way.

I can't offer my fiat, they would not want it, and they won't offer their fiat because I will not take it. This is the reason why bitcoin ends up with being so much more important. Because it can replace dollar.

This is the key advantage of the DL for EVERYONE-a single unit of value transfer that, while subject to inflation, is not affected by it in the same way as all other currencies in the world.
By the way-what’s stopping other countries from making payments to each other in their local currencies? Think about it! The answer is extremely simple-it’s complicated and… NOT PROFITABLE!!! On the global market, it’s more convenient and profitable to buy with dollars. If a country’s central bank has a "mix" of 150 currencies, how will it buy goods with dollars? That’s right, by selling local currencies for dollars, incurring a loss on every transaction.
Will cryptocurrency change this situation? Probably, but for that to happen, the world’s largest economies would need to start accepting it...

[Fortify]

1. Trade
A) Most countries bill each other in dollars.
B) Oil, gold, wheat = All priced in USD.
C) Most shipping contracts are in USD too.

2. Finance
A) Most international payments use USD.
B) Loans in USD are cheaper.
C) 9 out of 10 currency trades involve USD.

3. Power 
A) Every country needs USD to buy stuff.
B) The US can sanction others by blocking USD.

4. Will it change?
A) China, Russia, India want to use Yuan/Rupee.
B)  But USD is still king and 60% of the world still uses it.

It is changing, slowly, because China wants more independence and less reliance on US debt - they've been a major seller over the last decade which has only escalated since the erratic behavior of Trumps trade wars. Russia for obvious reasons is also cut off from trading in US dollars, not that they ever necessarily wanted to do so anyway. However many other countries still use it as their effective day to day trading currency, even if it's not their official currency. Sometimes it is out of the hands of the government and this happens in a black market, because the citizens don't trust their own currency. There have been many instances of hyper inflation which can devalue other currencies and is much less likely with the wide circulation of the US dollar.

[WillyAp]

 A larger danger for the USD are the stablecoins which are readily available, easy to manage.
For me they are not Crypto but digital FIAT.

[DrBeer]

...

It is changing, slowly, because China wants more independence and less reliance on US debt - they've been a major seller over the last decade which has only escalated since the erratic behavior of Trumps trade wars. Russia for obvious reasons is also cut off from trading in US dollars, not that they ever necessarily wanted to do so anyway. However many other countries still use it as their effective day to day trading currency, even if it's not their official currency. Sometimes it is out of the hands of the government and this happens in a black market, because the citizens don't trust their own currency. There have been many instances of hyper inflation which can devalue other currencies and is much less likely with the wide circulation of the US dollar.

I can partly agree, but... If we look at the process of China’s asset diversification in relation to U.S. government debt, holdings of debt obligations are indeed declining (estimated at approximately $850 billion by 2026), but what is replacing this decline? From open sources:

-Physical gold: Beijing’s primary defensive asset. The People’s Bank of China (PBC) has been making a record series of continuous monthly purchases of the precious metal (in June 2026 alone, it purchased an additional 15 metric tons). China’s official gold reserves have already exceeded 2,330 metric tons.

-U.S. Agency Bonds: Beijing is not completely abandoning the dollar, but is changing its form. Instead of direct loans to the U.S. government (Treasuries), China is buying debt obligations issued by U.S. quasi-governmental mortgage corporations (such as Fannie Mae and Freddie Mac). These offer higher yields but are less transparent in terms of geopolitical tracking.
 
-The euro, the yen, and gold-producing assets: China is diversifying its currency basket and acquiring physical infrastructure (stake in overseas lithium, gold, and cobalt deposits) around the world as part of the global “Belt and Road” initiative.
In other words, this is not a sell-off of U.S. Treasury debt, but rather a diversification into more attractive assets, based on an analysis of the global economy for the coming decades.

[WillyAp]

In other words, this is not a sell-off of U.S. Treasury debt, but rather a diversification into more attractive assets, based on an analysis of the global economy for the coming decades.

Why would you give away or abandon a tool of influence over the US Government?
Holding a sizable piece of treasury bond gives you leverage.
It also lowers the risk for a war like scenario. 

Converting them into US loans issued by U.S. government mortgage corporations is kind of a compromise.

I think the US reads all those conversions, and weighs up what is going on. Clearly their interpretations differ from the previous government.

[Oluwa-btc]

In a world where we are dealing with someone who is not from our country, we will always use USD as the benchmarket to calculate the value. I will switch that dollar to my fiat, and the other person will switch that dollar to theirs, and they will all calculate and we will see if it is a good deal or not that way.

I can't offer my fiat, they would not want it, and they won't offer their fiat because I will not take it. This is the reason why bitcoin ends up with being so much more important. Because it can replace dollar.

And what happens if you decide you do not want to trade with that?

True. If there's a more daily use of Bitcoin, it is most definitely be the biggest currency but I still believe some Dollar agents wouldn't want to see that already.
The US dollar is mainly influenced and dominant which is eventually thank you to the support from the GGC countries.

[hyudien]

If we go back in time after World War 2, the USD has been established as the world currency, and why has it survived to this day? that's because in line with the achievement of America as a country with the strongest economy to date, making the USD gain confidence for investors or countries as a global medium of exchange. The dominance of the American dollar will hardly collapse despite attempts to dedolarization.

[AmoreJaz]

If we go back in time after World War 2, the USD has been established as the world currency, and why has it survived to this day? that's because in line with the achievement of America as a country with the strongest economy to date, making the USD gain confidence for investors or countries as a global medium of exchange. The dominance of the American dollar will hardly collapse despite attempts to dedolarization.

Up until now, we can't eradicate the fact that most of the financial transactions in the world market is based on USD. However, Russia and China are trying to get away from it as they are trying to inject the Chinese Yuan in their own trading market. But, up until now, USD still dominates if we are talking about the world trading market.