To further internationalize China's yuan, Beijing could adopt a two-pronged innovation strategy in products and institutional set-up, says a senior investment banker who is also a member of China's top advisory body.

The yuan has flourished overseas over the past years, Fang Fang, a member of the Chinese People's Political Consultative Conference (CPPCC) and Asia vice chairman of J.P. Morgan Investment Banking, told Xinhua on Wednesday.

China has so far signed currency swaps with 18 countries, involving a total amount of 1.67 trillion RMB, he said.

In 2012, cross-border trade settled in the yuan jumped 41 percent to 2.94 trillion yuan, according the People's Bank of China.

The yuan's growing global clout is a direct result of the concerted efforts of Chinese leaders to internationalize the currency and China's rising economic prowess, Fang said.

To bolster international use of the yuan, he proposed, Chinese authorities need to offer more diversified yuan-denominated investment products and services.

This will attract more investors to use the yuan as a settlement and investment currency, paving the way for its ascendence to a major global reserve currency, he said.

On top of that, institutional innovation, especially in the overseas branches of Chinese financial institutions, is also needed to provide more professional services, Fang said.

Fang revealed that China's central bank is close to signing a currency swap deal with the Bank of England.

On the fallout from quantitative easing policies adopted by central banks, including the United States, Japan and the European Union, Fang said it has made the yuan's go-global campaign more challenging.

Greater fluctuations in the global main currencies have highlighted the need for the prudent monetary policy, he said.

As a CPPCC member, Fang last year submitted a proposal aimed at expanding an offshore "capital pool" of China's yuan through bolstering investment channels and options for the currency.