Why can't we all just use USD?

The appeal of one currency

One money for everyone would mean no exchange rates, no conversion fees, easy comparisons. Travelling and trading would be simpler. So why not?

The problem: who's in charge?

If everyone used USD, the US central bank (the Federal Reserve) would effectively run the world's money. Their decisions would be made for Americans, not for you.

• If Singapore's economy slows down but the US is booming, the US might raise interest rates, making borrowing harder for Singaporeans even when Singapore needs the opposite.
• A country can no longer adjust its own currency to handle shocks.

Currency as a shock absorber

When a country has its own currency, it can let its value fall during tough times. That makes its exports cheaper and helps the economy recover. This is called devaluation. With someone else's currency, that tool is gone.

Real examples

• El Salvador adopted the US dollar. Simpler trade, but it gave up the ability to manage its own money.
• Eurozone countries share the euro. Strong economies like Germany and weaker ones like Greece share one currency, which has caused tensions when their economies move differently.

What it means for you

Singapore uses the Singapore dollar, managed to stay stable against a basket of major currencies. That stability is one reason Singapore is a trusted place to do business.