Financial service trade is not only an important part of service trade, but also an important channel for the flow and allocation of factors at home and abroad. The improvement of the competitiveness of financial service trade is conducive to the mutual promotion of domestic and international dual circulation. The continuous improvement of the level of RMB internationalization has effectively promoted the development of China’s foreign trade. However, the existing literature lacks research on the relationship between currency internationalization and the competitiveness of financial services trade. This paper believes that the improvement of a country’s currency internationalization level enhances the recognition of its currency in international economic activities, and expands the serviceable range and scope of its currency. It can reduce the explicit transaction costs caused by currency exchange and the implicit transaction costs caused by exchange rate fluctuations in its financial services trade. It also helps to improve the development quality of the domestic financial industry and the level of opening to the outside world, so as to expand the effective demand for financial service trade, improve and optimize the supply quality and structure of financial service trade, and improve the competitiveness of domestic financial service trade from both supply and demand. Only when the level of currency internationalization continues to increase significantly, its effect of promoting the competitiveness of financial services trade will appear, and the opening of the financial industry will significantly strengthen this effect. Based on the three functions of currency, an evaluation index system of currency internationalization level is constructed, and the principal component analysis method is used to measure the internationalization level of 8 currencies including the US dollar, the euro, the British pound, the Japanese yen, the RMB, Australian dollar, the Canadian dollar and the Swiss franc. Then, the panel data from 2013 to 2019 is used to examine the relationship between the level of currency internationalization and the competitiveness of financial services trade. The analysis results show that the internationalization level of RMB has been increasing year by year, showing a rapid development trend, but it still lags behind other currencies in the SDR currency basket; the improvement of the currency internationalization level of the sample countries (regions) has a significant promotion effect on the overall competitiveness of their financial services trade, but this promotion effect is heterogeneous, which shows that the internationalization of currencies included in the SDR basket has a significant promoting effect on the competitiveness of financial service trade. However, the internationalization of currencies not included in the SDR basket has not produced a significant effect on promoting the competitiveness of financial services trade; financial FDI has a regulating effect on currency internationalization to promote the competitiveness of financial services trade, which shows that the increase of financial FDI inflow will significantly enhance the promotion effect of currency internationalization on financial service trade competitiveness. Compared with the existing literature, this paper has expanded and deepened this study from the following two aspects. One is to expand the research on the economic effects of currency internationalization from the perspective of financial services trade; the other is to empirically analyze the relationship between currency internationalization and financial service trade competitiveness by taking eight major international currencies as samples, and further test the moderating effects of currency heterogeneity and financial FDI, which provides empirical evidence for currency internationalization to promote the competitiveness of financial services trade. This paper verifies the role of currency internationalization in promoting the competitiveness of financial service trade, which is helpful to accelerate the process of RMB internationalization in the current complex international economic environment, and give full play to the role of RMB internationalization in promoting the competitiveness of financial service trade.