[CydeWeys]

This is a really bad misunderstanding of how governmental monopoly on violence affects the acceptance of its currency.

The USD has value because you need to pay your taxes in USD, and if you don't pay your taxes, the government will take away your freedom. It has nothing to do with people in other countries transacting in that country's local currency.

[globalreset]

That's also a myth that doesn't make sense.

If it was about taxes people would just hold something else and converted some temporarily to pay their taxes leaving government with currency nobody wants.

It's all about people's trust and willingness to store savings and make loans in a given current.

[nequo]

> would just hold something else and converted some temporarily to pay their taxes

Wouldn’t this expose those people to exchange rate risk that they could completely avoid by holding USD instead?

[CydeWeys]

> If it was about taxes people would just hold something else

Not following this at all. You having to pay tax in USD means you're going to prefer holding USD and being paid in USD as well. Anything else would be strictly inferior, as now you have to worry about doing conversions all the time.

Note that it's mandatory for taxes to be withheld with each paycheck, and those withheld taxes must be paid in, you guessed it, USD, so you must be paid in USD as well.

[globalreset]

> You having to pay tax in USD means you're going to prefer holding USD and being paid in USD as well.

Huge part of the world have to pay taxes in their local currencies and yet prefers storing savings in USD.

> Anything else would be strictly inferior, as now you have to worry about doing conversions all the time.

You weight it against other pros and cons. Even US billionairs do not store their savings in USD cash, and don't seem to mind "conversions all the time".

[bombolo]

See what happens to countries that decide to sell their oil in € instead of $…