The Bank of England has appointed one of China’s “big four” banks as the Chinese currency clearing bank in London.
The China Construction Bank will be the London renminbi clearing house.
The appointment is part of a plan to make London a hub for Chinese currency dealing.
Standard Life chair Sir Gerry Grimstone said renminbi trading is the most important issue facing the City of London at the moment.
In March, the Bank of England signed a memorandum of understanding with the People’s Bank of China setting out the deal.
The banks have said they want to encourage the cross-border use of renminbi, or yuan, to rebalance the global economy.
Bank of England governor Mark Carney said the appointment was an “important milestone”, because the Chinese bank would “play a valuable role in facilitating greater use of the RMB [renminbi] for trade, investment and other economic activities in the UK”