So wait, does this mean that if an exchange is far outside of the US jurisdiction, it can be subject to the US laws simply by trading in dollars?
How is that even remotely legal?
How is that even remotely legal?
Forget about exchanges. If a random business anywhere in the world buys a product from a factory in a neighbouring country and settles in dollars, this applies.
the problem is you can't access global liquidity pools easily with the former. and if you're a B2C company and want to sell to US customers, then the US claims jurisdiction.
That's the difference.
their banks can form their own interbank exchange, they can even make a central bank that does "open market operations" (can buy and sell things on this exchange from pure air - like the NY Fed's trading desk which is basically the executive manifestation of the FOMC), but of course it'll have a mighty hard time to get price stability. not to mention that the US wouldn't be happy