Today, the US dollar is the most prominent currency in the world. This is tied to the fact that the US has the largest economy, along with the dollar’s use globally, as most countries worldwide rely on it to support their economy. This fact makes the dollar a more commercially viable currency.
Also, several nations have tied their currencies to the dollar or adopted it as their official currency. In 2024, about half of international payments were made in US dollars.
One way to measure the dollar’s pivotal role in the global economy is its share in international reserve currencies. The US dollar is still the world’s dominant reserve currency, yet it has lost almost five percentage points of international reserves in the past 10 years. The biggest footprint of the dollar is in foreign exchange transactions, almost 90% of which involved the currency in mid-2024.
The US share of global GDP stands at around one quarter, while the country's share in global trade in commodities and commercial services is lower, at around 11%.
America’s central position in the world economy also means that almost every other nation’s economic success is partially tied to the US. If the US dollar suddenly lost value due to an event like a recession, every country relying on it could experience economic disruption. This is partly what occurred after the 2008 Financial Crisis when global stocks fell by more than 40% following the US housing market crash.
