Since late 2008, the Federal Reserve had engaged in three rounds of quantitative easing (QE) to prevent the US economy from free-falling, massively increasing the supply of US dollars. In demand, some foreign countries tried to reduce their exposure to the US dollar. However, the value of US dollar does not seem to have been negatively affected by these developments. Can we rationalize the US dollar? The factors previously identified as making a currency suitable for being given international currency status may be insufficient when it comes to defending the US dollar. A group of economic anthropologists have emphasized the importance of money’s credit function. We infer that when a country’s currency is used internationally not only as a medium of exchange but also a means of international credit, especially, among people, it will be unrivaled in its influence and the world will have a hard time dissociating from it. It allows to hypothesize that the world will continue using the US dollar, because, along with other superiorities, it is the most globally used currency for creating and dissolving debts amid individuals, that is, the most popular means of international credit, chiefly owing to the colossal immigrants to the country.
Keywords: US dollar, credit function of money, immigration to the United States, exorbitant privilege, money as a medium.
Cite as: Yea, S. (2020). A reason why we could be still optimistic about the future of the US dollar: The legal tender of the country of immigrants. Journal of Qualitative Social Sciences, 2(4), 1-21.