Why can't the currencies of many countries be used for cross-border payments?

In our daily business, we will find that many small countries are highly dependent on the US dollar in cross-border settlements (with the US dollar as the basis of the international settlement currency), but they are unable to use their own currencies for external settlements. Through years of business learning and experience, in the gradual overseas business, some clues have been discovered.

1. Domestic financial foreign exchange control, strictly prohibiting the outflow of domestic currency.

The characteristics of these countries lie in their small economic volume and vulnerability to external capital, which leads to severe instability in exchange rates. Therefore, in order to stabilize the exchange rate, they generally adopt relatively strict foreign exchange control and do not allow the use of their domestic currencies for external settlements.

For example, Nigeria and Brazil do not allow the local currencies (naira and real) to be used in cross-border settlements. Entries and exits can only be exchanged into the corresponding required international settlement currency (usually the US dollar) before external settlements can be made.

2. The currencies of small countries cannot be traded in the global financial foreign exchange trading market

The most important manifestation is that in the global foreign exchange trading markets (London, New York, Hong Kong, and Tokyo), if the currency of a certain country does not exist in these trading markets or the trading frequency is very low, it indicates that the country's currency lacks liquidity and exchange value in overseas foreign exchange trading markets.

3. Support of the global clearing network

At this time, we have to mention SWIFT again. Although SWIFT is only a message sending and receiving system, it has been of great significance for the development of cross-border payments over the years. As for why I write about the support of the global clearing network here? The main reason is that the currencies of many small countries are actually