The US dollar is the single most important currency in the world with comfortably the largest share in terms of currency transactions, reserve currency and global investment presence.
The use of the US dollar by the US to achieve global geo-political objectives has been termed “weaponisation of the US dollar” and is a reflection of the leverage that the US has in any globally-applicable policy.
On the sanctions and AML-related front, the power of the US dollar is such that individuals, entities and governments would hesitate before risking being cut off from US dollar transactions, such is its pre-eminence globally.
As a result, the global dominance of the US dollar as a currency has given US policy on sanctions and AML and extra edge, adding weight to its potency. For commercial entities and particularly investors and financial services players, the role of the US dollar globally is second to none.
So any risk/reward analysis of global investments or strategy must take account of the potential serious consequences of engaging in actions which might lead to apparent violations of US policy.
A proactive, pre-emptive, pragmatic and results-oriented approach to US$ Dominance is therefore essential.