After prolonged and bitter debate, the international agreement at Bretton Woods in 1944 was to use the USA dollar backed by gold as the international currency, but this has given an unfair advantage to USA ever since. For decades the use of the US dollar has been absolutely dominant in international trade. This has had tremendous benefits for the US financial system and for US consumers, and it has given the US government tremendous power and influence around the globe. Today more than 60 percent of all foreign currency reserves in the world are US dollars. If people in a mutual credit scheme like a LETS scheme or a trade Barter Company can trade with each other without interest being paid, so can nations. And this is starting to happen.
We would argue for an international currency with a clearing facility so we would promote an International Clearing Union with export credit accounts for trading among member nations. If banks can clear their credits with each other every night overnight, so can countries.
Of course we are not arguing for a single world currency as being the only currency. That is the ultimate in giving too much power to a central authority. That is a monoculture doomed to failure. We are arguing for an international currency in the context of multiple currencies – systems within systems within systems.
China and Japan are dumping the US dollar and trading directly in their own currencies. Currently business in both countries need to buy US dollars before converting them into the desired currency. The BRICS (Brazil, Russia, India, China and South Africa plan to start using their own currencies when trading with each other, according to a new agreement. Russia and China also have an agreement and both countries have been advocating for a new global reserve currency for several years. Africa and China have some bilateral trade in their own currencies. China and UAE have a deal to use their own currencies in oil transactions with each other. India may begin to use gold to trade with Iran. China and Saudi Arabia are now trading and worth watching.
The United Nations has been pushing for a new World Reserve Currency and so has the IMF. The latter has published a series of reports and one report has suggested that the future global currency be named he Bancor, not tied to the conditions of any particular economy.