eurodollar

Foreign banks can create dollar-denominated liabilities much larger than their reserve of actual dollars, without the need to adhere to US banking regulations, reserve requirements, etc., and without the benefit of FDIC deposit insurance. You deposit some rubles (or whatever) at the bank, ask to convert them to dollars, and the bank just makes a note in its books that it owes you X dollars (and meanwhile loans out the rubles). Even though the bank doesn't necessarily have any dollars in its reserves, your account still contains 'dollars' created by the (non-US) bank. These are called 'eurodollars'Historically due to European banks wanting to trade dollar-denominated assets, though the term is now used generically for all foreign-created dollars., and are riskier than American dollars due to exchange risk taken on by the bank and because they exist outside of US bank regulation and deposit insurance.

At some point you'll ask the bank to withdraw actual dollars, either as cash or as a transfer to a US account. The bank will need to hold dollar reserves and/or be willing and able to buy dollars at market rate to fulfill your request. You can see how this can go wrong: if the exchange rate shifts such that the bank's non-dollar reserves are no longer enough to cover its dollar liabilities, or if the bank is sanctioned and unable to buy dollars, then you don't actually have the dollars you thought you had.