The Chinese currency renminbi (RMB), or yuan will become the world's third largest currency after the U.S. dollar and Euro by 2020.

A report by the International Monetary Institute of Renmin University of China and the Bank of Communications, published on Sunday, said that the RMB internationalization index had risen to 1.69 by the end of 2013 from 0.92 a year before.

The main impetuses for the internationalization of the RMB come from cross-border trade settlement and direct investment.

In 2013, China's cross-border RMB trade settlement hit 4.63 trillion yuan (759 billion U.S. dollars), up 57.5 percent year on year, and RMB direct investment totaled 534 billion yuan, up 90 percent year on year.

The institute and the bank have been jointly issuing RMB internationalization reports annually since 2012.