Why Is the U.S. Dollar So Popular Around the World? | World101

The U.S. dollar is the world’s most popular currency, and the U.S. economy greatly benefits from that fact. The dollars’ role as the world’s favorite currency began in 1944 at the Bretton Woods conference, which took place after World War II with the purpose of creating a strong international monetary system and promote financial stability. Since then the trajectory of the U.S. dollar as a global currency has changed many times, from fixed exchange rates to abandoning the gold standard in 1977. Due to its open financial markets and its network effects, the international demand for dollars has increased, benefitting the U.S. in three important ways: it makes borrowing cheaper, it increases Americans’ purchasing power, and it gives the country more diplomatic advantage. To learn more about the role of the U.S. dollar visit our Monetary Policy and Currencies module: world101.cfr.org/global-era-i...
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