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All USD transactions clear through the Fed. If you are a bad bank they might not clear your USD transactions. That could be bad for business.
by philiphodgen 12y ago
All USD transactions clear through the Fed. If you are a bad bank they might not clear your USD transactions. That could be bad for business.
- MichaelGG 12y agoWhat prevents another system being put in place, if other banks agree to use it?
- tomp 12y agoIt's illegal (one of the missions of US Secret Service is to ensure that there are no other currencies used in the US, and they have cracked down e.g. on Las Vegas casino tokens being used in surrounding restaurants to pay for drinks).
- MichaelGG 12y agoI meant for non-US banks. What stops "London" from setting up its own USD clearinghouse and having non-US banks start using that? Simple pressure from the US?
- tomp 12y ago> Simple pressure from the US? Possibly. Basically, the US can force the banks to do what they want, because the ability to retail within the US is worth so much. So either they, or the banks they work with, could be pressured to comply.