The US Dollar is one of the seven reserve currencies in the world. Unlike in the past, the dollar today is not backed not anything but the full faith and trust of the U.S. government. Essentially the dollar and other reserve currencies are just a pieces of paper similar to other currencies like the Ukraine Hryvnia, Botswana Pula, Croatian Kuna, Swailiand Lilangeni, Bhutan Ngultrum, etc. However the dollar and other reserve currencies are valued more in the global market.
The majority of the world’s currency reserves are held in US dollars and is the preferred currency in global trade.However the dominance of the dollar in trade may be in decline as countries and international groups are switching from dollar to national currencies in trade.
The following infographic offers interesting insights on the ongoing evolution of trade in currencies other than the dollar:
Click to enlarge