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avatar of @markkujantunen
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@markkujantunen
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Don't forget that the US dollar is legal tender the United States. That means three things:

  • Taxes and fines must be paid in it.
  • Those with an accounting obligation must hold accounts as the dollar as the unit.
  • You must accept it as repayment of a debt if you want the government to enforce the repayment of that debt.

Using the US dollar in the US is overwhelmingly the path of least resistance for businesses and individuals. And because of that everyone else uses it which only reinforces it being the path of least resistance.

Each nation or currency areas has an official currency as its legal tender. In each country, legal tender is the de facto means of payment and unit of account unless that currency has been debased as a result of mismanagement.

Dislodging the US dollar from its dominant position in the US is pretty hopeless unless the government and the Fed mismanage the monetary system so badly that the nation loses trust in the dollar. In the world, however, it makes sense for central banks to not only keep US dollars in their currency reserves but other major currencies as well. The Japanese yen or the euro are also held by many countries to some extent.