According to data from Swift, USD accounted for 40% of cross-border payments in 2017.
There are at least 4 reasons behind this choice:
- US Dollar is the most traded currency. It acts as the unofficial global reserve currency and is held by nearly every central bank in the world;
- USD has a global acceptance. It is used by some countries as an official currency or acts as an informal alternative form of payment (along with a national currency);
- USD acts as a benchmark (or a target rate) for those countries that opted to fix their currencies to the USD’s value. An important factor at the foreign exchange rate market;
- USD is used as the standard currency for most commodities (oil, precious metals etc.).