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The kind of trade that we're talking about here isn't consumers buying a few books or DVDs online. For business to business deals where the counterparts aren't
by jsnell 15y ago
The kind of trade that we're talking about here isn't consumers buying a few books or DVDs online. For business to business deals where the counterparts aren't using the same currency one of them would have to take a risk due to the exchange rate changing (or pay money to hedge against it). And that risk could be significant even for one-off transactions with Net30/Net60 payment terms.
Of course for a large multinational dealing with these issues comes naturally. But for a small to medium business dealing with different currencies is going to cause a lot of friction.
- cheez 15y agoSure, that is the role of banks.