Jerome Powell, Speech: Welcoming Remarks, International Roles of the U.S. Dollar, a research conference

“The international financial and monetary system that emerged after World War II has been defined by the centrality of the dollar. It is the world’s reserve currency and the most widely used for payments and investments. As outlined in recent work by Board staff, this global preeminence has been supported by the depth and liquidity of U.S. financial markets, the size and strength of the U.S. economy, its stability and openness to trade and capital flows, and international trust in U.S. institutions and the rule of law.”

“The dollar’s international role holds multiple benefits. For the United States, it lowers transaction fees and borrowing costs for U.S. households, businesses, and the government. Its ubiquity helps contain uncertainty and, relatedly, the cost of hedging for domestic households and businesses. For foreign economies, the wide use of the dollar allows borrowers to have access to a broad pool of lenders and investors, which reduces their funding and transaction costs.”