Competition for offshore renminbi business is getting fiercer as financial centres seek to grab a share of the pie and capitalize on Beijing's ambition to make the renminbi a global currency. With billions of dollars in transaction and servicing fees up for the grabs, the race is on.

The impact the continued internationalization of the renminbi will have on the global monetary landscape cannot be overstated. To give this some context, around 20% of China's US$4 trillion in annual foreign trade is conducted in renminbi today, a figure which could surge to over 30% as early as next year and see the renminbi become one of the top three global trade currencies. It would not be naïve to suggest that it could rise to as much 50% by 2017.

Hong Kong is still the undisputed number one offshore renminbi payments centre with a 71% market share, but its leadership position is slowly eroding having dropped by around 10% over the last three years with London and Singapore both establishing themselves as strong alternatives. While their market shares are minor when compared with Hong Kong today, languishing in single digits, I expect we will see both centres surge forward and break away from the rest of the pack over the next few years. By 2020, it is possible we will see London and Singapore join Hong Kong to form the top three renminbi offshore centres by market share.

With China-EU trade representing the second largest global economic co-operation pact, and with more than 40% of all global foreign exchange trading taking place in London, it was no surprise two years ago to see London take the initiative to position itself as the main offshore trading centre for the renminbi. It quickly rose to a commanding position and assumed the second largest centre in respect of market share.

Many expect Singapore will play a similar role in renminbi trading as China gradually opens up its capital markets and liberalizes its currency. Singapore's rapid ascendancy has been fuelled by the fact that offshore renminbi growth to date has been driven primarily by trade finance settlement. With Singapore as the main trade finance hub for Asia-Pacific, and the predominance of intra-Asia trade, it is not surprising to see Singapore proving an attractive centre for offshore renminbi payments too.

Singapore had a small head start over London in already having an infrastructure to process and provide easier access to renminbi locally in the form of a nominated clearing bank - China's state-owned ICBC. Whilst London and Beijing have also signed an agreement to set up a renminbi clearing bank in London, no institution has yet been named.

Despite the competition between the two financial powerhouses, Singapore and London have agreed to cooperate on further development of offshore renminbi through a new 'UK-Singapore Financial Dialogue' agreement between the two countries. Announced in February 2014, this private sector forum can only be of mutual benefit to both countries.

That said, neither London nor Singapore can become complacent and assume they are guaranteed market leadership. Countries that have traditionally had strong trade or investment ties with China, such as Korea, Germany and France, are also seeking to be at the heart of renminbi offshore trading and have a strong case. Even those centres which do not have historic ties with China are making overtures to attract China's financial clout. Luxembourg, for example, has an attractive pitch: minimal red tape and a business-friendly political regime in a country where the financial services industry is the biggest contributor to gross domestic product (GDP) - at 25% last year. The country has recently publicly stated it wants to become an overseas centre for Chinese investments and it will be interesting to see how it fares.

While this competition from rival centres is acutely important to those involved, from China's perspective Beijing is less concerned about the competition for market share between offshore renminbi centres than with expanding the number of locations to further promote and accelerate the internationalization of the currency. You see this in some of the recent announcements from Beijing where plans are in place to designate clearing banks in Paris and Luxembourg to complement London, Frankfurt, Singapore and Sydney as official offshore renminbi cities. Only time will tell who the winners will be, but I believe by 2020 we will see a three-horse race between London, Singapore and Hong Kong for supremacy, with Hong Kong probably continuing to lead the way.

Fred DiCocco is the Asia-Pacific head of sales and relationship management for BNY Mellon's Treasury Services