|After Japan surrendered unconditionally on 8/15/1945, the Nationalist government decided to issue "Central Bank of China notes for Taiwan". This "Central Bank of china notes for Taiwan" was printed and ready to be issued, and the CBC is setting up its branch in Taipei. However, due to the special status of Taiwan, the Nationalist approved the usage of Bank of Taiwan notes, as a provisional currency. The first proposal was canceled.|
The legitimate government reestablished Bank of Taiwan on 5/20 1946. Banknotes issued by Japanese can be exchanged with old Taiwan Dollar (old Taiwan Dollar was not old until the monetary reform in 1949, when "new" Taiwan Dollar was introduced) at the rate of 1:1. 3,443,700,000 Yuan (former Yen) was converted. The first series of Taiwan Dollar are 1 Yuan, 5 Yuan, and 10 Yuan. They were printed by Central Printing Factory (at Shanghai) and transported via ship.
In the next few years, Taiwan suffered hyperinflation because of the civil war against the communist that took place in mainland. BOT started to issue higher and higher denominations. The highest denomination is P1961 1 million issued in 1948 provisional "Circulating Bank Cashier's Check", to be circulated concurrently with regular Taiwan Dollar. There is also a P945A 100,000 Yuan regular Taiwan Dollar printed but not issued. The total amount of (old) Taiwan Dollar issued was 527 billion.
To stop the worsen situation, the central government approved Taiwan provincial government to issue "New Taiwan Dollar", and Taiwan Province declared "Monetary Reform Regulation of Taiwan Province", which dictated that 40,000 old Taiwan Dollar were converted to 1 New Taiwan Dollar. On 6/15/1949, 1 Yuan, 5 Yuan, 10 Yuan NTD were issued, and on 7/5, 1 Cent, 5 Cents, 10 Cents, and 50 Cents notes were issued.
On 7/1 1961, the Central Bank of China was restored in Taipei, with the promulgation of the "Regulation of issuance of New Taiwan Dollar in Taiwan by the Central Bank of China". Therefore, the actual issuance right has been transferred from Bank of Taiwan to CBC, while BOT is only responsible for the distribution of NTD notes.
Despite the change, the text "Bank of Taiwan", the seal of Chairman of the Board of Bank of Taiwan and seal of General Manager of Bank of Taiwan were still present on the bill. Thus many people mistakenly thought the banknotes were still issued by BOT. By the Central Bank of China Law modified in 1979, NTD became "the same as national currency".
With the issuance of P1993 1000 Yuan on 7/3 1999, (new) Taiwan Dollar banknotes are officially issued by the Central Bank of China; the text and seals are modified accordingly (seal of CEO of CBC and seal of CBC); and NTD become "the national currency".