Luxembourg wants bank for yuan deals

Having an official clearing bank also allows more liquidity for the offshore renminbi center that hosts the bank. Moreover, it bears symbolic significance for the offshore renminbi center in that it has recognition from the Chinese government.

France leads eurozone in offshore RMB payments

RMB clearing bank in London within sight

Gramegna added that he hopes to stress Luxembourg's achievement in growing renminbi businesses over the past few years during his upcoming trip to China, pointing out the large volume of the currency's businesses that Chinese banks already conduct in Luxembourg.

Currently, Bank of China Ltd, Industrial and Commercial Bank of China Ltd and China Construction Bank Corp all host their European headquarters from Luxembourg, playing a major role in growing the offshore renminbi pool in Luxembourg.

According to official figures as of December 2013, Luxembourg has the largest pool of renminbi in the eurozone with 64 billion yuan in deposits, 53.8 billion yuan in loans, 24.7 billion yuan in renminbi bond listings and 256.4 billion yuan in renminbi-denominated assets held in investment funds.

Renminbi trade finance in Luxembourg in 2013 was 86.8 billion yuan.

There are now 44 renminbi bonds listed on the Luxembourg Stock Exchange. In comparison, the London Stock Exchange has listed only four.

Nicolas Mackel, chief executive officer of Luxembourg for Finance, a government agency, added Luxembourg plays an important role in helping the renminbi to internationalize, particularly in helping it to move from a trade currency to an investment currency.

He said Luxembourg's abundance of renminbi investment products attracts a large pool of offshore yuan, while renminbi transactions in Luxembourg help to grow the liquidity of the currency as an investment option.