Comment by oblio
7 days ago
Look up the petrodollar.
If I'm Romanian and my currency is leu (RON) and you're Mexican and your currency is pesos (MXN), you don't want my RON since you can't use it for anything except for imports from Romania and I don't want your MXN since I can only use it for imports from Mexico.
If we both agree on USD, I can go to any other country which wants USD (all of them) and buy whatever I want.
Trading in USD means that all your transactions become known by a third party (US). That is why everyone should be interested in cutting out the middle man.
they dont have to be its just more convenient.
That's the case for everything except for bartering or using commodities (gold, etc) as intermediate trading mediums.