America Didn't Invent the DollarMost people assume the U.S. dollar was invented by the United States. It wasn't.In fact, the dollar's story begins nearly 500 years ago with a silver coin called the *Joachimsthaler*, first minted in what is now the Czech Republic.Over time, the coin became known simply as the *Thaler*. Eventually, that name evolved into what we now know as the "Dollar." But that's not the most surprising part.Even after the United States gained independence, Americans continued using Spanish silver dollars for decades. Spanish dollars were so widely trusted that they remained legal tender in the United States until 1857.Think about that for a moment. The currency that would eventually dominate the global financial system wasn't originally American at all.What made these coins valuable wasn't the government behind them. It was something much simpler: people trusted them. They were widely accepted, consistent in quality, and easy to use in trade.At first, that trust came from silver. Later, it came from gold. Then came another turning point.In 1971, the United States officially ended the dollar's direct link to gold. For the first time in centuries, the world's most important currency was no longer backed by a precious metal.Many expected that to be a problem. Instead, the opposite happened. The dollar became even more dominant.Today, roughly 90% of foreign-exchange transactions involve the U.S. dollar in some form. Governments hold it as a reserve asset. Companies use it to settle international trade. Investors around the world rush into dollars during periods of uncertainty.And here's another little-known fact: Trillions of dollars exist outside the United States through the Eurodollar market. Banks across Europe, Asia, and the Middle East create dollar-denominated deposits beyond America's borders, meaning a significant portion of global dollar liquidity is created outside the direct reach of the Federal Reserve.The history of the dollar reveals something fascinating. The world's most powerful currency wasn't carefully designed from the start. It wasn't born in Washington. It wasn't originally backed by American power. Instead, it evolved over centuries through trade, trust, and global adoption.And perhaps that's the biggest lesson of all: The world's reserve currency is not ultimately backed by gold or silver. It's backed by trust.@The_Economist_Telegram