Last week China launched its yuan-denominated gold benchmark - with twice-daily auctions on the Shanghai Gold Exchange (SGE) to fix the price of gold.
There will be 18 trading members taking part in the yuan price-setting process.
In addition to Chinese banks, there are two foreign banks, Standard Chartered and ANZ, two of China's biggest gold miners plus the world's top jewellery retailer Chow Tai Fook.
The launch of the Shanghai exchange is being hailed as a landmark event which will challenge the century-old system of fixing the gold price in London on the London Bullion Market Association (LBMA).
This is significant as gold is not only a commodity but it has been used historically to set the level of global currencies.
Even today it is recognised as a highly valuable asset class which is held as reserves by the IMF, governments and central banks around the world.
One important difference between the gold fix on the SGE and the LBMA is that the SGE requires the party purchasing gold futures to deposit physical gold at the exchange.
This is expected to create a price differential, with the Chinese exchange having a higher price than the London exchange.
Traders will seek to arbitrage this differential by buying on the London exchange and selling on the Chinese and this in turn will influence the London price and attract business to the Chinese market.
There has been much speculation about the significance of the establishment of the SGE.
At the simplest level it will give China a greater say in the bullion industry.
Since China is the world's largest producer and importer of gold it would like to have more influence on the gold price and the fix priced in yuan will help it to achieve this.
This is in line with China's moves to trade other commodities in yuan - six of the top 10 globally traded futures contracts are now sold on Chinese exchanges with prices from iron ore to copper increasingly being set in China.
Later this year China will pass another major milestone when it begins trading its first crude oil contracts in yuan.
The trend towards pricing commodities in the Chinese currency will also accelerate China's plans to internationalise the yuan.
As more and more transactions take place in yuan, governments, central banks and companies will wish to increase their holdings of yuan reserves.
This in turn will support Shanghai's role as a leading financial centre.
On the first day of trading on the Shanghai exchange the gold price per ounce rose by about US$10 (S$13).
However this is likely to have been caused by factors other than the new gold fix, notably the weakening of the dollar in response to the release of economic data in the US.
Although the new gold fix on the Shanghai Gold Exchange is an extremely interesting development - especially for countries such as Thailand which are major importers and exporters of gold - the yuan is not yet fully convertible and there are restrictions on the export of gold, so the full impact will not be felt for some time.
The writer is CEO of the Bangkok Bank (China) .