In the past few months, Taiwan’s print media seem to have become engulfed in a “digital currency fever” — almost every day there are reports about digital currencies saying that central banks in many countries are rushing to research and issue them.
On Oct. 10 last year, the Chinese-language Economic Daily News reported that seven major national central banks, including the US Federal Reserve, had drafted principles for the issuance of central bank digital currencies (CBDC), in the hope of catching up with China.
The Liberty Times (the Taipei Times’ sister newspaper) in June last year reported that Taiwan’s central bank completed a study on “wholesale CBDC feasibility technology” for large interbank transactions.
Eighty percent of central banks around the world have initiated such research, and others are taking an increasingly positive view of CBDCs.
Why are Taiwan’s — rather than Japan’s or the US’ — financial media suddenly filled with reports about digital currencies?
China is a pioneer in advocating digital currencies. The People’s Bank of China began researching them in 2014 and founded research institutes in 2017.
In April last year, it announced that internal “digital renminbi” pilot tests would be conducted in Chinese cities including Shenzhen and Beijing, the venue of next year’s Winter Olympic Games.
China believes that when digital currency technology is mature, the digital renminbi would be used for borrowing and transactions under its Belt and Road Initiative so it can bypass the US dollar-based SWIFT system.
This shows that the Chinese central bank’s acceleration of digital currency development is intended to challenge the hegemony of the US dollar.
A digital currency researcher in Beijing has said that “future international competition may focus on the field of digital finance, and digital currency could be the ultimate battlefield.”
Broadly speaking, a digital currency is an electronically realized currency, such as transactions through mobile phones or tablets via the Internet. Third-party payments such as Google Pay, Apple Pay and online banking currencies can all be counted as digital currency.
The People’s Bank of China has said that “China needs to be the first country to issue a digital currency to promote the internationalization of the renminbi and to reduce its dependence on the US dollar payment system.”
However, the digital currency the statement referred to can only be called an improvement or a new payment system for the digitization of yuan payments. The currency is still the yuan, although it is not referred to as such.
A digital currency must inevitably be based on a mechanism for issuing currency that is trusted by banks, including central banks. There is no substantial difference between what China calls a digital currency and the internationally used US dollar. The only difference is the name and their relative values.
As China’s economy grows stronger, and the conflict between the yuan and the US dollar intensifies, the question for Taiwan is which side it should take.
Perhaps it would be more appropriate to call the People’s Bank of China’s digital currency a cash card issued by China’s central bank, as that digital currency is nothing more than propaganda from Beijing and a publicity stunt.
A “cashless society” is the ultimate goal of digital authoritarian regimes to control people’s thoughts and economic behavior. It is by no means a goal pursued by the free world.
Taiwanese do not need to dance to Beijing’s tune or act as its stooges.
Huang Tien-lin is a former advisory member of the National Security Council.
Translated by Lin Lee-kai
Taiwan stands at the epicenter of a seismic shift that will determine the Indo-Pacific’s future security architecture. Whether deterrence prevails or collapses will reverberate far beyond the Taiwan Strait, fundamentally reshaping global power dynamics. The stakes could not be higher. Today, Taipei confronts an unprecedented convergence of threats from an increasingly muscular China that has intensified its multidimensional pressure campaign. Beijing’s strategy is comprehensive: military intimidation, diplomatic isolation, economic coercion, and sophisticated influence operations designed to fracture Taiwan’s democratic society from within. This challenge is magnified by Taiwan’s internal political divisions, which extend to fundamental questions about the island’s identity and future
The narrative surrounding Indian Prime Minister Narendra Modi’s attendance at last week’s Shanghai Cooperation Organization (SCO) summit — where he held hands with Russian President Vladimir Putin and chatted amiably with Chinese President Xi Jinping (習近平) — was widely framed as a signal of Modi distancing himself from the US and edging closer to regional autocrats. It was depicted as Modi reacting to the levying of high US tariffs, burying the hatchet over border disputes with China, and heralding less engagement with the Quadrilateral Security dialogue (Quad) composed of the US, India, Japan and Australia. With Modi in China for the
The Chinese Nationalist Party (KMT) has postponed its chairperson candidate registration for two weeks, and so far, nine people have announced their intention to run for chairperson, the most on record, with more expected to announce their campaign in the final days. On the evening of Aug. 23, shortly after seven KMT lawmakers survived recall votes, KMT Chairman Eric Chu (朱立倫) announced he would step down and urged Taichung Mayor Lu Shiow-yen (盧秀燕) to step in and lead the party back to power. Lu immediately ruled herself out the following day, leaving the subject in question. In the days that followed, several
The Jamestown Foundation last week published an article exposing Beijing’s oil rigs and other potential dual-use platforms in waters near Pratas Island (Dongsha Island, 東沙島). China’s activities there resembled what they did in the East China Sea, inside the exclusive economic zones of Japan and South Korea, as well as with other South China Sea claimants. However, the most surprising element of the report was that the authors’ government contacts and Jamestown’s own evinced little awareness of China’s activities. That Beijing’s testing of Taiwanese (and its allies) situational awareness seemingly went unnoticed strongly suggests the need for more intelligence. Taiwan’s naval
RSS