LME Clear, the clearing house for the London Metal Exchange market, said on Tuesday it would start accepting offshore renminbi as eligible cash collateral.

Bank of China's London branch has become the first Chinese settlement bank for LME Clear. This follows regulatory approval for the initiative from the Bank of England.

"We welcome LME Clear's renminbi initiative, which marks a milestone in providing tailored clearing services for the global metals industry," said Wang Huabin, deputy general manager at Bank of China's London branch.

"This demonstrates the commitment of BOC to develop itself as a truly global bank," Wang said.

It also shows that BOC is lending support to the global plans of Chinese commodity firms and developing its service capabilities.

According to data provided by international clearing services provider SWIFT, the Chinese currency is already one of the top-five global payment currencies.

"The renminbi is on its way to become one of the world's most widely used currencies, and we are pleased to be able to help our members take advantage of the opportunities arising from the renminbi's internationalization," said Trevor Spanner, chief executive of LME Clear.

The initiative comes in response to calls from LME Clear members to extend the list of accepted cash collateral to include offshore renminbi. LME is the futures exchange with the world's largest market in options and futures contracts on base and other metals. Hong Kong Exchanges and Clearing is the LME's parent company.