A senior official with the Chinese mainland's central bank said Tuesday the mainland is choosing a bank for Renminbi settlements in Taiwan, adding that currency settlement cooperation can achieve mutual benefit across the Taiwan Strait.

Wang Huaqing, discipline head of the People's Bank of China (PBOC), the central bank, as well as vice chairman of the China Society for Finance and Banking, made the remarks at the 17th cross-Strait seminar on finance and banking held in Taipei.

Wang said the selection work for a Renminbi clearing bank in Taiwan is still in progress in accordance with relevant procedures and requirements. He also said building the cross-Strait currency settlement mechanism will take time and take banks' willingness into consideration.

After the two sides signed a memorandum on cross-Strait currency settlement at the end of August, Taiwan's monetary authorities selected the Shanghai branch of Bank of Taiwan as the clearing bank for New Taiwan Dollars (NTDs) in the Chinese mainland.

According to the deal, the two sides will establish a currency clearing system by each designating a bank to carry out currency settlements and liquidations for the other side.

Qualified banks will be able to carry out cash exchanges of currencies in accordance with relevant laws and regulations. The two sides have also agreed to use currencies from the two sides in settlements and in transactions of goods and services, investment and other economic activities.

Wang added that monetary cooperation will become an important part of financial cooperation across the Taiwan Strait and create broader prospects for academic exchanges.

"The cross-border flows of Renminbi and NTDs will benefit enterprises and banking sectors from both sides of the Taiwan Strait, as it lowers the cost of currency exchange and the risk of exchange rate fluctuation for businesses on both sides," added Wang.

Li Ji Jhu, a senior official with Taiwan's financial regulation authorities and a professor at Taiwan's Cheng Chi University, said at the seminar that Taiwan will play a unique role in the process of the internalization of the Renminbi, adding that Taiwan's monetary authorities will not rule out making the Renminbi a foreign exchange reserve currency.

"The settlement agreement is seen as a further step toward the internationalization of the Renminbi," said Tony Phoo, a senior economist with Standard Chartered Bank. "Taiwan has strong potential to become the next offshore Renminbi market after Hong Kong."