According to the global transaction services organization Society for Worldwide Interbank Financial Telecommunication, the yuan ranked as the eighth most-used currency for payments in December 2013 and overtook the euro as the second most-used currency for trade finance in October last year.

The move is the first of a series of detailed measures expected to be introduced this week after the People's Bank of China announced in December a 30-point guideline supporting financial liberalization in the Shanghai free trade zone.

Jian Danian, vice-chairman of the zone's administration, said the pilot area will be given more freedom in the financial sector before the annual session of the National People's Congress — the nation's top legislature — in March, in addition to Tuesday's milestone.

Upcoming policies are expected to provide more flexibility in interest rates and reducing control over foreign exchange, he said at a lunch meeting organized by AmCham Shanghai, the city's US chamber of commerce, which was attended by more than 150 foreign companies.

According to Jian, there are more than 6,000 companies registered with the zone so far, including about 400 foreign-funded firms, most of which deal with foreign trade.

"But there will be more financial institutions coming in as financial reform advances," he said.

Several foreign banks, including Citigroup Inc, also known as Citi, and Deutsche Bank AG, have already launched automated renminbi cross-border pooling solutions for their clients in the zone, a move that will help multinational companies optimize their cash management and improve capital efficiency.

"We're not creating a separate financial center here in the FTZ. The aim is to better serve the real economy," Jian said, adding that it would be normal for zone-registered banks to provide services elsewhere in the city.

Companies in the zone might enjoy a favorable income tax rate of 15 percent for their overseas equity investment if such a move is approved by the central government in the first half of this year, Jian said.