China's yuan is a growing force in global finance, more than doubling in use over the past year, according to a new study from the Institute of International Finance Thursday.

Although its use in the international payments system remains dwarfed by the dollar and euro, the yuan, officially known as the renminbi, grew to 1.4 percent of total transactions.

That jump moved it ahead of the Hong Kong and Singapore dollars and even with the Swiss franc, the sixth most used currency in global transactions, the IIF study said.

In trade finance, overwhelmingly dominated by the US dollar, the yuan jumped into second place last year ahead of the euro and the Japanese yen, comprising eight percent of transactions.

And despite Beijing's still firm controls on its use, the yuan has become the ninth most-traded currency on foreign exchange markets, the volume hitting $120 billion daily on average, compared with $34 billion in 2010.

The study by the IIF, a global association of leading banks, said the gains have come as Beijing slowly frees up the currency for international use.

There are clearing banks for yuan transactions now in five international centers: Hong Kong, Macau, Taiwan, Singapore and, since early this year, London, the world's leading foreign exchange center.

Yuan-denominated bonds, so-called dim-sum bonds, have jumped since the government first permitted their issue in Hong Kong seven years ago.

"While true internationalization would require much greater capital account liberalization, the Chinese government continues to take measured steps towards opening China's ﬁnancial markets."

"Further gradual steps to widen the currency trading band --and a more market-determined exchange rate -- will help this process," the IIF said.

The use of the yuan is still much smaller than China's presence in the global economy: almost 12 percent of all global trade flows and 11 percent of capital flows.

Its 1.4 percent share of international transactions is far below the euro's 42.5 percent and the dollar's 31 percent.

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The government continues to keep a firm hand on its use, in part not wanting to release its control on the key yuan-dollar exchange rate.

The United States has repeatedly accused China of keeping the yuan undervalued to enhance its export strength, exacerbating the huge US trade deficit with China.

Beginning in 2010 the yuan strengthened from 6.83 per US dollar to 6.05 per dollar last year, but has since fallen back to 6.2, despite ongoing US pressure over the valuation.

Ironically, China's fast economic growth and the US pressure had until recently helped limit the growth of the yuan in offshore lending. International deposits of the currency amount to 1.5 trillion yuan, or $240 billion, but yuan loans are minimal.

The IIF said that was because yuan interest rates were high and, until recently, investors held onto the currency in expectation of steady yuan appreciation.