At the colonial period first paper money is issued by Massachusetts Bay Colony which is a colony among the thirteen original colonies and hence the paper money method to cover costs gradually spread to other colonies. Later, paper bills are issued in printable form features inimitable impressions and pattern which is first printed by Benjamin Franklin. However so many restrictions aroused against the paper bills of colonies and in the year 1764 Britain completely prohibited the paper money. After a decade continental congress developed a paper currency but that currency lost it value very shortly due to the easily forged impressions and symbol. It is the reason for the phrase “not worth a Continental.”In the year 1781 the first national bank bonded by congress in Philadelphia which is the place where first printable form of paper bill introduced and issued by Benjamin Franklin. This Bank of North America is for the purpose to deal the financial operations. And finally dollar is declared as a money unit by congress in the year 1785.
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Today US dollar is powerful currency in the world and most of the circulation of USD is detained outside the United States. Hence dollar is accepted as chief currency internationally. Other countries trade with US in dollars and therefore dollars are the major capital flow.This strength makes US to structure monetary policy without any dependence on exchange rate fluctuation which is a major advantage of US dollars. And this the basic reason for the interest of foreign countries towards Unites States, so bill of exports and imports of commodities and services are in US dollars. Since domestic purchasing power of dollar is high US can concern dollar denominated claim without an exchange and this is considered as an advantage in matter of borrowing in dollar.
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