RMB enters the SDR, but according to Beijing this is only the beginning

Late on Friday in the U.S., which was October 1 for many parts of the world, the Chinese RMB currency was officially placed into the IMF's Special Drawing Rights basket.  And despite the fact that China has been internationalizing the Yuan at an ever accelerating rate since 2013, this move into the SDR will be just the first step towards much greater changes according to Beijing.

China’s central bank said Saturday that the country will continue to push financial reforms and market opening after the inclusion of its currency renminbi into the International Monetary
Fund’s (IMF) Special Drawing Right (SDR) currency basket.

The IMF on Friday announced the launch of the new SDR basket including the yuan, effective from Saturday, saying it was a “historic milestone” for China, the IMF and the international monetary system.

China welcomes the move, which will strengthen the representativeness, stability and attraction of the SDR while advancing the reform of the international monetary system, the People’s Bank of China said in a statement on its website.

Inclusion of the renminbi, or the yuan, into the SDR represents a milestone in the internationalization of the yuan and a recognition of China’s progress in economic development as well as financial reforms and opening up, the central bank said.
— En.people.cn

Last month China was given the power over internationalizing and selling M SDR bonds which would help expand the international currency for use in trade settlement.  And this move, coupled with the RMB's increase in global settlement, is a de-facto Bretton Woods type maneuver that has the intended purpose of ending the polar reserve currency mechanism that has run the global financial system for the past 70 years.

But as noted out of China's government earlier today, the RMB's inclusion into the SDR is just the first step into a much bigger game, and economic analyst Jim Rickards on Sept. 29 announced what and when the next move will probably take place.

What’s the next important step in this New World Money Development?

On Oct. 7, the IMF will hold its annual meeting in Washington, D.C., to consider additional steps to expand the role of SDRs and make China an integral part of the new world money order. But there’s another looming development that has implications for the adoption of SDRs…

The return of the BRICS.

“BRICS” is an acronym for Brazil, Russia, India, China and South Africa, which are among the largest emerging-market economies and make up about 22% of global GDP. Five years ago, discussion in international monetary circles was all about the rise of the BRICS. It appeared the BRICS would mount a serious challenge to U.S. dollar hegemony. Then the BRICS story went quiet in 2014–15. It looked like the BRICS story was fading in importance. But now that’s changing.

At the G-20 Leaders’ Summit in Hangzhou, China earlier this month, BRICS made a very interesting demand. They may be 22% of the global economy, but they only hold 14.89% of the votes at the IMF.

Any individual country or group of countries with 15% has veto power over certain major IMF decisions, including the issuance of SDRs. Only one country has over 15% today, and that’s the United States. The BRICS are now demanding that their IMF vote move closer to their share of the world economy and past the 15% threshold.

If that happens, then the IMF will not be able to flood the world with SDRs in a liquidity crisis unless the BRICS agree. No doubt the BRICS will agree, but only if other steps are taken at the same time to destroy the privileged position of the U.S. dollar in global payments and reserves. The BRICS are back in town, and it has implications for the adoption of SDRs… and the dollar.
— Daily Recknoing

What this means in a nutshell is that a consortium of nations, led primarily by China, now have the power to remove the U.S.'s autonomous control over the IMF and other facets of global finance, and will seek to even out the voting rights within the dedicated financial infrastructures currently holding sway over the global monetary system.

China has never sought to usurp the U.S., nor take its place by having a singular reserve currency as the medium of exchange in global trade settlement.  However, they are no longer in a position to have to rely upon the dollar to be economically sustainable, or in U.S. hegemony to carry out their sovereign goals of bi-lateral trade.

The first step in a long game of transition is now complete, and the next steps will be to both end the petro-dollar's hold over global trade, and to end America's domination over the world's monetary system.  After that, the steps leading towards the end game appear to be a return of the gold standard in some form or fashion, and to help rebuild the world's overall economy that is now collapsing under its own weight of inescapable debt.