The current G20 meeting, in China, is discussing many issues, including the disasters in Japan. But, what seems to be the focus is how to bring China into the SDR, and, China’s desire to remove the U.S. dollar as the international reserve currency.

The G20 is made up of bankers and finance officials from 19 countries, and the European Union.  Their objective is to come up with finance and banking systems for a global economy.

Because of China’s growing economic strength, the G20 would like to have the Chinese yuan brought into the SDR.  That is the Special Drawing Rights fund, which is currently as close as you can get to an international money.  It is meant to make huge international transactions easier for members. The SDR replaced gold and silver as standards for international trade in 1969.

China is worried about continued reliance on the U.S. dollar as THE reserve currency for international trade.  Many Chinese economist, and other economist around the world, believe the U.S. dollar’s value is overrated, and is unstable.  They call the use of the U.S. dollar as the world’s reserve currency a “dollar trap”.

“Nations around the world have no way of restricting dollar issuance by the Federal Reserve. The current international monetary system lacks both stability and fairness.”- Xu Hongcai, deputy director at the China Center for International Economic Exchanges

Basically China wants a new international reserve currency, no more U.S. dollar.  This will play into the hands of those who want a true international form of money.