The central bank said on Thursday that it had designated Bank of China Ltd as the first yuan-clearing service bank in Frankfurt, the latest step in the nation's drive to bolster international use of the currency.

The move came a day after China Construction Bank Corp was designated as the first yuan-clearing bank in London.

In a statement on its website, the People's Bank of China appointed Bank of China as the first bank in the eu ro area able to clear payments in the Chinese currency.

The selection of the lender's Frankfurt branch will help Germany's financial capital become a hub for yuan trading, experts said. The German and Chinese central banks agree d on March 28 to cooperate in the clearing and settlement of transactions in the yuan.

Since March, three issuers have sold yuan-denominated debt in Frankfurt.

"The reason for Frankfurt to facilitate euro-area trade is because it is the center for the Europe an Central Bank. And in exactly the same way, London is the sterling center and the link is between sterling and the renminbi," said Andrew Main, managing partner of Stratton Street Capital LLP.

During Premier Li Keqiang's visit to the UK this week, China Construction Bank, the country's second-largest lender, clinched a deal to become UK's first clearing bank for the yuan. London is also aiming to become the leading Western center for the offshore yuan trade.

The PBOC said on Wednesday that the Chinese currency will be traded directly against sterling in the interbank foreign exchange market, a new step to facilitate investment and bilateral trade between China and Britain.

London, which dominates the $5 trillion a day global foreign exchange market, accounts for two-thirds of all renminbi payments outside of the Chinese mainland and Hong Kong, according to UK Chancellor of the Exchequer George Osborne.

Osborne also said on Wednesday the increasing importance of the yuan could lead to a "historic shake-up" of the global financial system, and he wants the United Kingdom to play a central role.

Financial centers such as London, Frankfurt, Luxembourg, New York, Paris and Singapore are competing to become the top offshore yuan hub as China promotes the use of its currency in international trade.

The yuan ranked seventh as a global payments currency in April, according to the Society for Worldwide Interbank Financial Telecommunications.

Industrial and Commercial Bank of China Ltd was previously selected to provide yuan-clearing services in Singapore, while Bank of China was designated as a yuan-clearing bank in Australia.

CCB Chairman Wang Hongzhang said in London on Thursday that the bank will seek to provide a prompt, secure and efficient yuan-clearing service that satisfies the needs of other banks in London.

Wang said because CCB in London is currently a subsidiary of the parent bank, it has set up an arrangement with the headquarters in the form of a direct guarantee, to make sure CCB London can have the financial capacity to accommodate its new clearing bank role.

Wang said CCB has already submitted an application for a branch license to the UK regulators, although he didn't know when approval will be granted.

Branch status gives a bank much larger lending and financing capabilities than those of a subsidiary.

Wang said its clearing platform acts as a complement to existing clearing channels in London, as opposed to causing competition.

He said the signing of cooperation agreements between CCB and 11 major banks shows that other banks trust it to provide this service.