Currencies

China's yuan breaks into the world's top five as payment currency

Getty Images

China's yuan broke into the top five as a world payment currency in November, overtaking the Canadian dollar and the Australian dollar, global transaction services organisation SWIFT said on Wednesday.

After nearly a year firmly positioned at seventh spot, the yuan reached a record high share of 2.17 percent in global payments by value and is in sight of the Japanese yen, which has a share of 2.69 percent.

The U.S. dollar, euro and British pound remain the top three world payment currencies.

Here's why you should short the Chinese yuan
VIDEO2:0202:02
Here's why you should short the Chinese yuan

"It is a great testimony to the internationalization of the RMB and confirms its transition from an 'emerging' to a 'business as usual' payment currency," Wim Raymaekers, Head of Banking Markets at SWIFT said in a statement.

The rise of various offshore yuan clearing centers around the world, including eight new agreements signed with the People's Bank of China last year, was an important driver fueling this growth.

Read MoreCan China deliver on Asian economy?

Global yuan payments increased by 20.3 percent in value in December compared to a year earlier, while the growth for payments across all currencies was 14.9 percent for the same period, SWIFT said.

Over the last year, yuan payments grew in value by 102 percent compared to an overall yearly growth for all currencies of 4.4 percent.

China is expected to make another push for the inclusion of the yuan in the International Monetary Fund's in-house currency basket in a review later this year - and this time round its G20 partners may be willing to listen.

The main argument against its inclusion in the Special Drawing Rights, a basket of yen, dollars, pounds and euro used as the IMF's in-house unit of account, is that the yuan is far from freely "usable" or convertible. But that argument has been gradually weakening as yuan offshore trading surges.