Commentary: The U.S. is preparing to stifle the issuance of CBDC. Why is the Central Bank of Taiwan eager for it?

The same central bank digital currency (CBDC) has a very different fate in Washington DC and Taipei, in the eyes of the US Congress, CBDC seems to be a Pandora's box of hidden "risk", while in the hands of Taiwan's central bank, the digital NTD is regarded as a ferry to the financial future. (Synopsis: The central bank publicly details the digital NTD that "retail CBDC" can be used by everyone!) Bearer wallets require mobile phone authentication) (Background supplement: V God: Taiwan, World ID's single ZK identity is risky, must move towards multiple digital identities) The US House of Representatives loaded its bullet and prepared to vote to ban the Fed from issuing digital dollars during "crypto week" in mid-July, citing that "government-controlled digital currencies" may infringe on citizens' property privacy. At the same time, Taiwan's central bank is actively promoting the pilot of the digital new Taiwan dollar, and even took the lead in launching field application tests with "Hakka coin" digital vouchers in July this year. Why do the same democratic governments treat CBDCs differently? The answer may lie in the difference in the social mentality between the two places about privacy and financial innovation. The Digital Dollar in the Shadow of Privacy In the United States, privacy rights are at the heart of the debate surrounding CBDCs. The Anti-CBDC Surveillance State Act, pushed by the House Financial Services Committee, explicitly aims to prevent the Federal Readiness Council from issuing digital dollars. The bill, led by Republican Congressman Tom Emmer, the majority whip of the U.S. House of Representatives, emphasizes that the digital dollar lacks cash-like privacy protections and may become a tool for the government to spy on citizens' transactions and interfere with economic freedom. Emer bluntly said that CBDC is a government-programmable digital currency, and without a built-in privacy mechanism, it will give the federal government the power to unilaterally monitor people's transactions and restrict "politically unwelcome activities." In the eyes of the interpretation and supporters of the bill, the digital dollar is like a Trojan horse cloaked in innovation, with hidden ambitions to expand financial regulation. Extended reading: The US House of Representatives began the "Crypto Week" legislative marathon on the 14th: stablecoins, regulatory boundaries, anti-CBDC! Mainstream public opinion in the US Congress is quite wary of this. This year, House majority leaders stressed that a permanent ban on CBDC issuance is necessary to protect Americans' financial privacy. Congressional Republicans even see banning CBDCs as the key to maintaining the leadership of digital assets in the United States, arguing that only by ensuring that citizens' financial freedom and privacy rights are not infringed can the United States win the future digital economy race is not only supported by ideological factors, but also supported by voter attitudes: in a 2023 survey of the United States, only 16% of Americans support the government's implementation of CBDCs, opponents are as high as 34%, and the remaining nearly half have no clear opinion. When learning more about the potential risks of CBDCs, a majority of Americans have a more negative attitude: 68 percent say they would categorically oppose the digital dollar if it allowed the government to monitor their spending. Overall, 76% of respondents believe that the government should not issue a CBDC because it may allow the government to monitor people's purchasing behavior and control how they spend their money. It can be seen that the fear of privacy infringement is deeply ingrained in mainstream American public opinion. This worry flows in the veins of Americans, with pro-ban politicians often citing examples from other countries: China's digital renminbi (e-CNY) is seen as a powerful tool for the government to monitor people's economic activity, and Canada's 2022 freeze on protesters' bank accounts is even more alarming that digital financial sovereignty is in the hands of the government and could cut off the lifeblood of citizens' objections. Although Federal Reserve Chairman Powell did not explicitly oppose the digital dollar, he also repeatedly emphasized the principle of "doing things right, not rushing", saying that only with the broad support of Congress, the government and the public can the Fed move forward with the CBDC plan. As the issuer of global reserve currencies, the Fed understands the importance of the U.S. dollar and is wary of sensitive issues that touch on universal accounts and transaction information. It is worth noting that in this debate, although both parties in the United States have doubts about CBDCs, the starting point is slightly different. Republicans are more inclined to oppose CBDCs from the perspective of preventing government abuses, and a significant percentage of Democrats have reservations, questioning hegemony is American nature. Regardless of party, the traditional idea that "cash is anonymous freedom" is deeply rooted in the hearts of Americans, as the proverb "In God We Trust" printed on dollar bills stems from Americans' trust in cash due to its anonymous nature and sense of physical control. The degree of privacy and freedom represented by one-hand payment and one-hand delivery requires a very careful trade-off for U.S. citizens who respect personal privacy and property freedom. Innovation with privacy (?) In contrast to the concerns of the United States, Taiwan has taken an active but cautious approach to retail CBDCs, the so-called "digital NTD". Yang Jinlong, governor of Taiwan's central bank, once said that the issuance of CBDCs must be very careful, especially when it comes to privacy issues, and he pointed out that China "does not care about this area" in the process of implementing the digital yuan, which is different from different regimes that attach importance to privacy. Although Taiwan will not lag behind the international pace, it is by no means blindly seeking speed, such as neighboring South Korea in the cryptocurrency policy is quite strong, before the election to shout for the promotion of CBDC, but at the end of June suddenly called a halt, which shows the disorder of the new government's internal decision-making. Nonetheless, Taiwan's central bank has significantly accelerated its pace with retail CBDCs recently. In June 2025, the central bank announced the complete design blueprint of the digital new Taiwan dollar at the public hearing, and announced that it will conduct a small-scale trial for the first time in July in conjunction with the "Hakka coin" plan of the Hakka Committee of the Ministry of Culture, allowing the public to experience the CBDC payment process in the form of digital revitalization coupons. In terms of institutional design, Taiwan's central bank tries to find a balance between innovation and privacy to resolve doubts about CBDC information leakage and government surveillance. The "public-private dual architecture" is the so-called technical foundation of the digital NTdollar: the central bank only provides the underlying issuance and clearing platform to distribute digital currency to commercial banks or electronic payment institutions; These intermediaries open digital wallets for users, provide payment app access and other services. In other words, the central bank does not deal directly with the people, maintains the existing two-tier financial system, and makes the circulation model of the CBDC mimic the current cash and deposit system. This design avoids the Fed's fear of a "central bank docking with individuals" model, which reduces the risk of banks being directly "disintermediated". In terms of privacy protection, Taiwan's central bank is well aware of people's concerns about the government's access to personal transaction information, so it has introduced different levels of authentication options in the wallet design. Digital NTD wallets are divided into two categories: bearer wallets and bearer wallets: if people choose bearer wallets, they only need to bind their mobile phone numbers without providing other personal information, at the cost of a small wallet balance and transaction limit (currently limited to about NT$30,000). This anonymous wallet is like a digital version of physical cash, which is "more private" to use, and the funds cannot be recovered after they are lost, such as losing the wallet and losing the cash. Registered wallets need to be strictly verified by the bank (KYC), can enjoy a high balance and transaction limit (the upper limit of personal bearer wallets is initially 100,000 yuan), and provide services for recovering funds after loss and loss. Importantly, the central bank stressed that all user personal information will be properly kept by intermediaries in accordance with the Personal Data Protection Law.