Why has it achieved dominance? WSJ's Barry Eichengreen writes "First, its allure reflects the singular depth of markets in dollar-denominated debt securities. The sheer scale of those markets allows dealers to offer low bid-ask spreads. The availability of derivative instruments with which to hedge dollar exchange-rate risk is unsurpassed. This makes the dollar the most convenient currency in which to do business for corporations, central banks and governments alike.
"Second, there is the fact that the dollar is the world's safe haven. In crises, investors instinctively flock to it, as they did following the 2008 failure of Lehman Brothers. This tendency reflects the exceptional liquidity of markets in dollar instruments, liquidity being the most precious of all commodities in a crisis. It is a product of the fact that U.S. Treasury securities, the single most important asset bought and sold by international investors, have long had a reputation for stability."
"Finally, the dollar benefits from a dearth of alternatives. Other countries that have long enjoyed a reputation for stability, such as Switzerland, or that have recently acquired one, like Australia, are too small for their currencies to account for more than a tiny fraction of international financial transactions."
What will it mean? For foreign businesses, increased flexibility and greater savings since they can engage in transactions between, say, the Euro and Chinese currency without going through the intermediate exchange to use the dollar. Here at home, EIchenberger writes"the U.S. government will not be able to finance its budget deficits so cheaply, since there will no longer be as big an appetite for U.S. Treasury securities on the part of foreign central banks."
Details from WSJ here
Why is it called a dollar? Wikipedia: "On the 15th of January, 1520, Count Hieronymus Schlick (Czech: Jeroným Šlik z Passounu) of Bohemia began minting coins known as Joachimsthaler, named for Joachimstal (modern Jáchymov in the Czech Republic), where the silver was mined. (In German, thal or tal refers to a valley or dale.) "Joachimsthaler" was later shortened in common usage to taler or thaler (same pronunciation), and this shortened word eventually found its way into Danish and Norwegian as (rigs)daler, Swedish as (riks)daler, Dutch as (rijks)daalder, Ethiopian as ታላሪ talari, Italian as tallero, Flemish as daelder, and into English as dollar.
What is the origin of the dollar sign? Wikipedia: "The symbol $, usually written before the numerical amount, is used for the U.S. dollar (as well as for many other currencies). The sign's ultimate origins are not certain, though it is possible that it comes from the Pillars of Hercules on the Spanish Coat of arms on the Spanish dollars that were minted in the New World mints in Mexico City, Potosí, Bolivia, and in Lima, Peru. These Pillars of Hercules on the silver Spanish dollar coins take the form of two vertical bars ( ) and a swinging cloth band in the shape of an "S".
"Another explanation is that this symbol for peso was the result of a late 18th-century evolution of the scribal abbreviation "ps." The p and the s eventually came to be written over each other giving rise to $."
A fictional possibility suggested is that the dollar sign is the capital letters U and S typed one on top of the other. This theory, popularized by novelist Ayn Rand in Atlas Shrugged,does not consider the fact that the symbol was already in use before the formation of the United States."