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history of the use of the US dollar in many countries in the world, as
well as being the reserve currency of countries in the world, began with
the birth of Uncle Sam's national currency. Reporting
from Investopedia, Monday (22/11/2021), the US dollar was first printed
in 1914. Printing of US dollar banknotes was carried out a year after
the formation of the Federal Reserve (The Fed) as the central bank. ,
a description based on the Federal Reserve Act of 1913. The first bill
to be printed was the US$10 note with Andrew Jackson's face on it. According
to Investopedia, the US dollar's history as the world's reserve
currency goes back three decades after it was first minted in 1914.
History of the US Dollar Becomes the World CurrencyThe Fed's creation of the law was a response to the defense of a currency system previously based on individually issued paper money. At the same time, the US economy was then the strongest in the world, surpassing that of England. Even so, world trade is still centered in England, most of the transactions are still using the British currency, pound sterling. Several developed countries keep reserves in the form of gold to stabilize their currencies. However, when World War I broke out in 1914, many countries abandoned the gold standard so they could pay for military expenses with paper money, which is the value of their currency. However, Britain still uses the gold standard to maintain its position as the world's main currency. Therefore, during the three years of war,
The United States is also a debtor of many countries looking to purchase US dollar-denominated bonds. Finally, Britain abandoned the gold standard in 1931, which overwhelmed many of the world's traders who used the pound. Since then, the dollar has replaced the pound as the international reserve currency. Reporting from The Balance, the Bretton Woods Agreement in 1944 was the beginning of the US dollar being in its current position. Previously, many countries in the world used gold as a source of national savings. Developed countries met in Bretton Woods, New Hampshire, to determine their exchange rate against the US dollar because the United States was a country that had the largest gold reserves at that time. This agreement opens opportunities for countries to peg their exchange rates to US dollars, not gold.
Today's US Dollar
Based on data from the International Monetary Fund (IMF), the US dollar is the most popular currency in the world. In the fourth quarter of 2020, central banks around the world kept 59 percent of their reserves in US dollars. Many of these reserves are in the form of cash or bonds such as US Treasuries. Debt in US dollars outside the United States continues to grow, even reaching US $ 12.6 trillion in mid-2020. Although many people believe the US dollar is the strongest currency in the world, the US dollar is in the 10th position of the strongest currency in the world according to CMC Market. CMC Markets said the Kuwaiti dinar was the world's strongest currency with the British pound and euro taking 5th and 8th place respectively.86
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