The story began from World War II, the devastating war of all times. It was a war between major European Powers for supremacy over the other.  Just like in World War I, the U.S entry into World War II was only subsequent. Three years before its entry into W.W.II, U.S acted as a supplier of instruments of war for the allies against the axis powers through the Land- Lease Act,1941.

The war effort by the Allied Powers during WWII was financed by the Gold Standard, where each currency issued by a nation state during that time was backed up by an equivalent value of gold. Prior to WWII Great Britain with its vast reserve of gold was the central hub of the Gold Standard for the international economy and as a consequence, British Pound acted as the world currency of the pre-World War Economic System.

When the U.S provided supplies and inventory to the Allied Forces including Great Britain, through instruments such as the Lend-Lease Act,1941 it was in exchange for Gold. Consequently, before the end of the war, all Allied Powers including the Great Briton depleted all of its gold reserves forcing it to abandon the Gold Standard and U.S became the most economically powerful country among the Allied Forces with the greatest gold reserve by becoming the supplier of all goods and services for the Allied Forces. Whether intentional or not, the U.S profited greatly from the War.

To save the world economy from collapsing after World War II, the Allied Forces entered into an international agreement to establish the post WWII Economic Order at Britten Wood,New Hampshire, U.SA. through the Britten Wood Conference, convened in July 1944 ,A two-part Agreement known as the Britten Wood Agreements,1944 came into force. It also established the International Monetary Fund or IMF under International Monetary Fund Agreement, 1944 and the International Bank for Reconstruction and Development or IBRD under International Bank for Reconstruction and Development Agreement,1944. Through this Britten Wood System America took the initiative to peg the dollar with equivalent amount of gold reserve and making the dollar freely convertible to gold and to enable the parties to the Britton Wood Agreement to back up the value of their currency with U.S Dollar which was equivalent to gold, by which the Gold Standard was effectively restricted to the Post WWII Economic Order and making the U.S Dollar the new de facto world currency.

Countries exchanged gold in return for U.S Dollars and vice versa. All countries including the USSR who were not a member of the Bretton Wood System during the Cold War accepted U.S Dollars for importing and exporting goods and services between nations. The U.S currency was in wide use around the world after the Britton wood Agreement.

The reach and circulation of U.S Dollar around the world was so significant that the world took it for granted and even after the U.S unilaterally withdrew itself from the Gold Standard in 1971 through one of its doestic statute under President Nixon, the international community didn’t had any other options other than to continues to recognize the U.S as the most reliable and stable currency in the world through the institutions of IMF and IBRD.