I've heard of Eurodollars over the years, but to me it was just some term like Petrodollars. It was an abstract concept to me until this day until I saw your example of 1M USD-worth of UK Pound Sterling being used to buy 1M USD-worth of Japanese Yen. Both currency quantities had to be worth 1M USD, but USD itself was never involved.

At the time the Eurodollar system came into being, it was based on USD held in European banks outside the American banking system, is that correct? Then over time banks in Asia, Africa, The Americas, and Oceania entered this system but the name "Eurodollar" stuck, right?

Now I see why it will take a long time for USD to fail even if the Petrodollar is replaced by the Petroyuan (or even Petroruble) tomorrow. Eurodollar will have its own set of problems, but it's just too diffuse to be a concern any time soon.

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