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Whether you are a small market trader in Zimbabwe or a shipping magnate in Singapore, it’s likely you will be making quite a lot of transactions in US dollars. There is no other currency that is as widely accepted around the world. But how did the dollar come to play such a prominent role in modern business?
The Bretton Woods conference of 1944 officially turned the dollar into the main global reserve currency but the meeting simply formalised a situation that has been developing since the 1920s. After the end of the First World War, the United States lent money to impoverished Germany so that Berlin could pay reparations to London and Paris. In turn, Britain and France returned those dollars to Washington as payment for the war loans they had taken from the Americans.
The Bretton Woods system and its successors stabilised world economy but not everyone was happy with it: France in the 1960s made strenuous efforts to reduce what they saw as America’s ‘exorbitant privilege’ . More recently, China and its allies have been building up an alternative payments system that bypasses the dollar – and the West – completely.
Iszi Lawrence and guests follow the history of the US dollar from its origins in the American Civil War to today.