Singapore has overtaken London as the largest clearing center for China's domestic currency outside of China and Hong Kong, according to the Society for Worldwide Interbank Financial Telecommunication (SWIFT).
Data released by the SWIFT show the value of Singapore's payments increased by 375 percent between March 2014 and March 2013, making Singapore number one in terms of renminbi payments value, excluding China and Hong Kong.
Hong Kong accounts for 72.4 percent of the overall renminbi payments value, while Singapore and London account for 6.8 percent and 5.9 percent, respectively.
Singapore reclaimed the top position from London for the first time since June 2012, when the U.K. capital overtook the city-state's leading position.
The substantial rise in renminbi trades cleared in Singapore follows China's decision to name Industrial and Commercial Bank of China (ICBC) Singapore's official yuan clearing bank in February.
"Ever since last year's nomination of ICBC as a clearing bank in Singapore, we have been expecting the Singapore renminbi payments flows to accelerate, especially as Chinese companies use it as a hub to reach ASEAN countries," said Claus Kwon, head of securities markets, Asia Pacific, at SWIFT.
"Singapore has a natural strength in trade, a very trusted and reliable business environment and a talented pool of finance and banking professionals - all of this leads to an overall ease of doing business," Michael Moon, director of payments markets, APAC, SWIFT wrote in the official press release.
The process of 'clearing' is a procedure by which an organization acts as an intermediary between the buyer and seller to smooth banking and trading transactions.
Kwon also expects securities traffic to ramp up in Singapore as well.
"In April, the Monetary Authority of Singapore indicated in a speech that they are now looking to expand from a strong base in trade financing to developing a broader range of renminbi investment offerings, particularly in capital markets and asset management," he added.
In March, Yuan payments rose 29 percent on month in value to a record high. The yuan accounted for 1.62 percent of global payments, up from 1.42 percent in February.
The renminbi is gaining on the Canadian dollar, which has a 1.83 percent share, and the Australian dollar with a 1.84 percent share.
However, the Chinese currency is still far behind the U.S. dollar and the euro. Ranked first and second, respectively, they account for 40.19 percent and 31.78 percent of payments globally.
The SWIFT provides a network that enables financial institutions worldwide to send and receive information about financial transactions.