Honduras has taken this decision because Beijing has expanded its dollar diplomacy so as to isolate Taiwan and suppress its international participation. However, the PRC will neither be able to intimidate the democratic island nor disrupt regional peace and stability — Taiwanese people can count on their diplomatic allies and like-minded global partners to defend Taiwan's sovereignty on the international stage.
Given the PRC's relevance in today's world, Honduras will not be the last alleged diplomatic ally of Taiwan to cut ties with the island and seek better relations with Beijing. This decision has nothing to do with dollar diplomacy — a practice in which China has never engaged — but everything to do with a sovereign state following its own interests instead of those of the US and Taiwan secessionists.
There's a 50% chance that at least 13 UN member states will formally recognize Taiwan at the end of 2025, according to the Metaculus prediction community.