How dollar became the world's global currency? The complete story...

If you have done online transactions, then you know that most of the transactions takes place in dollars.Some transactions occur in currencies  such as Yuan and Euro, but it is the american dollar that controls 90% of the total market.Now, how does this happen? Why the american dollar is used as international currency?we will discuss the complete story here!

After WWII, the European countries have already suffered too much and were too small independently for their currencies to have any international significance(before the Euro).China and Russia also had economic and political doctrines incompatible with their money becoming "universal". It was only in the late 2000's that China started to push for itself.

The USA served as allies, providing weapons, supplies and other goods to other nations and it collected much of its payment in gold, and when the war was over, it was only the USA economy which was least affected by it.

Hence in 1944, delegates from 44 nations met in Bretton Wood (New Hampshire), to come up with a system to maintain foreign exchange in such a way that no country would face any kind of disadvantage. There, it was decided that the US dollar can be linked to gold, and this arrangement came to be known as Bretton Wood Agreement, making the dollar the global currency.As a result, the US dollar was officially crowned the world's currency, backed by the world's largest gold reserves.

But the story took a different turn, during the Vietnam war when the countries realized that the USA which was involved in conflicts was printing dollars as it wishes and moreover, it stopped them from auditing them. This resulted in France demanding its gold back, but US President Nixon not only refuse to do so, but he also decided to put a temporary stay on on the Bretton Wood Agreement.  As a result , the value of dollar become zero.

But after that, Nixon played his masterstroke that completely turned the table in favor of USA. He met with Saudi Arabia king and somehow was able to convinced him to sell his oil in dollars. Now, Saudi Arabia which had lost to Israel  during the Arab war agreed to these terms in exchange to security. Similar options were given to other OPEC nations.

This is one of the reasons why america have its military base in most of the oil rich nations. This deal created a monopoly of the oil trade denominated in US Dollars. Even after so many years, this process is continued.  However , there have been few attempts to come up with a new way such as Muhammad Gadaffi , in Libya wanted to create a gold backed trans African country, but was assassinated shortly thereafter. Similar fate happened with Saddam of  Iraq, who wanted to create a Euro based oil trading system. Hence, the monopoly of the Dollar still continues....