The Chinese yuan continues to gain stature in the world financial system.

Earlier this week, the London Metal Exchange announced it will begin accepting yuan as collateral for banks and brokers trading on its platform.

The LME is the largest metal trading venue in the world. It facilitated some $15 trillion in metal trades last year. The yuan joins the United States dollar, the euro, the British pound and the Japanese yen as allowable collateral.

The Wall Street Journal called the LME move “another milestone for China’s currency.”

Meanwhile, China, whose economy is a major driver of demand for a range of commodities, is also taking a greater role in metals markets specifically…In June this year, the London Bullion Market Association said that Bank of China Ltd. will become the first Chinese bank to participate in the daily process for setting the price of gold. China vies with India as the world’s largest consumer of gold, according to the World Gold Council.”

China has been buying up gold over the last several years, recently surpassing India as the world’s largest gold consumer. China’s gold reserves now rank as the fifth largest of any country in the world. The People’s Bank of China recently announced its gold deposits have grown by 57% to about 1,658 metric tons since it last revealed its holdings in 2009.

As Bloomberg reported last spring, some analysts believe Asian gold demand will double by 2030.

[Gold bullion]Demand in India and China, the world’s biggest buyers, will total 900 tons to 1,000 tons each this year and central banks will buy at least 400 tons, according to the World Gold Council.”

Ken Hoffman, Global Head of Metals & Mining Research with Bloomberg Intelligence, recently did an interview with Kitco News about the possibility of China putting its yuan currency on a gold standard, saying it’s been laying the groundwork for years –  buying up gold, starting a gold bank, building extra vaults, and soon launching a yuan gold fix. He said he believes the timing of it largely hinges on whether or not the International Monetary Fund decides to accept the yuan into its basket of reserve currencies this year.

The LME adding the yuan to its mix certainly can’t hurt the currency’s case in the eyes of the IMF.