> The swap deal will allow more trade and investment between the regions to be conducted in euros and yuan, without having to convert into another currency such as the U.S. dollar first, said Kathleen Brooks, a research director at FOREX.com.
The problem with using US currency as an intermediary between two other foreign currencies is that the transaction is subject to US law. I can recall a case between two european countries where the goods being paid for happened to be cuban in origin, thus the entire transfer was seized due to the cuban embargo. Between two european banks. That's just silly.
With the dollar still serving as the global reserve currency, it would have implications for everyone.
With the US economy still driving the majority of global consumption (though this is admittedly changing), it would have implications for everyone.
"Break" is, perhaps, mildly overstating the case. But, unless you live somewhere that doesn't interact with the outside world in any meaningful way, you would without doubt feel the pain of a sudden shift away from USD like that.
I don't disagree with you. Some time in the future, other tax jurisdictions will decide it is worth the short term pain to get off of the US$. I wouldn't be surprised if this happens slowly with end to end credit swaps, a few countries getting together to trade with alternative currencies, etc. It is in no one's best interest for this to happen very quickly. My personal bet is that in about 5 years, about half of world trade will be done in currencies other than the US$.
"The European Union and countries x, y, z agree to stop using the US dollar for all transactions due to spying..."