Chinese renminbi
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Last year, Chinese officials reportedly told EU members that the renminbi would be fully convertible by 2015. And recently, Chinese central bank governor Zhou Xiaochan said China is not too far away from its goal of yuan convertibility.

With Hong Kong already trading offshore yuan, and London hoping to take over that mantle in the coming years, China may just have taken another step toward making its currency convertible.

The China Development Bank initiative


China now plans to offer renminbi loans to other BRICS nations Brazil, Russia, India and South Africa, the Financial Times reported. The China Development Bank (CDBs) will reportedly sign a memorandum of understanding (MoU) in New Delhi with its BRICS counterparts on March 29. The five dominant emerging economies are signing the initiative in an effort to boost trade and promote the use of the renminbi for international trade over the dollar.
China first made the yuan convertible for trade settlement back in 1996. As of now 13 percent of China's trade in Asia is conducted in renminbi, but the renminbi's share of regional trade is slated to rise to 50 percent by 2015, according to HSBC. The renminbi's greater role in financing trade could also be a huge advantage for China since it forces other countries to take on the risk of adverse currency moves.

The internationalization of the yuan


Earlier this year Deutsche Bank analyst Alan Cloete said the renminbi is expected to become a major reserve currency in the next decade. He expects the U.S. dollar's share of the global reserve currency basked to fall from about 60 percent now, to 50 percent by 2020.

And signs of this are already apparent. First, many countries have been diversifying their foreign reserves to include the renminbi because they expect the currency to strengthen and eventually become a reserve currency. 0.3 percent of Chile's foreign reserves are held in renminbi. In September last year, major oil player Nigeria said it would diversify five to 10 percent of its foreign exchange reserves to include the yuan.
Second, China has expressed its interest in adding the renminbi to the IMF's Special Drawing Rights (SDR) currency basket, as a reserve currency. CDBs initiative if it goes through will only speed up the process.

At The Rise of the Renminbi conference, Hongbin Qu, HSBC's managing director said:

"The pace of the renminbi internationalization has been much faster than almost everybody expected in the last few years. We're expecting this trend to continue. In the next two to three years we expect the renminbi to become one of the top three global currencies being used in global trade."
For the renminbi to become fully convertible however, it would have to appreciate to fair market value and the government would have to cede some control of its financial markets. But it's unclear how likely this is. After all, PBOC governor Zhou recently said that currency convertibility doesn't mean surrendering control of cross-border financial transactions