Hong Kong could provide a good testing ground for the gradual liberalisation of the yuan as the currency spreads beyond the mainland, according to Hong Kong Monetary Authority chief executive Joseph Yam Chi-kwong. In his weekly online Viewpoint column published yesterday, Mr Yam said Hong Kong could play a part in the Chinese currency's role by 'cautiously implementing liberalisation measures'. 'I am sure a wider use of the [yuan] in the region or even beyond will have to be a gradual process and carefully controlled to ensure that the possible risks are properly managed,' he said. His remarks come as Hong Kong prepares to begin yuan-denominated trade settlements, which will allow exporters and importers in Guangdong and the Yangtze River Delta to settle cross-border deals in yuan. Chief Executive Donald Tsang Yam-kuen said last week the measure would help the city's bid to become a regional yuan clearing centre. Mr Yam also noted the global currency system could change in the future in view of China's rapid rise. 'In such a 'tripolar' world [Asian economies along with the US and the euro zone], it is perhaps desirable in the long term to have an international currency system that reflects the importance of different regions in the global economic structure,' the HKMA chief wrote. 'Such a system might help to increase global financial stability by diversifying risks in trade and investment.' Bank of China (Hong Kong) has said the US dollar's status as the global reserve currency will continue to decline as governments worldwide lose confidence in the unit and investors lose faith in dollar assets.