Samsung Electronics will conduct joint research with the Bank of Korea (BOK) to develop an ecosystem for a central bank digital currency (CBDC), according to the company, Monday.
The two sides signed a memorandum of understanding that day at Samsung’s headquarters in Suwon, Gyeonggi Province. CBDC is a central bank-issued digital currency and many countries are preparing to launch their own digital currencies for more transparent and secure transactions.
Through the agreement, Samsung and the BOK will continue to conduct research on a BOK-issued CBDC and collaborate in the offline payment sector.
Samsung already joined the BOK-led CBDC pilot project last year . At that time, it developed offline CBDC technology enabling device-to-device transfers and payments via near-field communication (NFC) even when both the sender’s and recipient’s transaction devices are not connected to the internet.
In other words, people can make transactions with their Samsung mobile devices with no credit cards or cash, even in remote areas with no network connections. Sending and receiving money is made on a chipset built into Samsung’s mobile devices and equipped with security features, Samsung said.
“Based on this technology, the two sides plan to continue research to minimize the security risks associated with offline payments using Samsung’s Galaxy smartphones and watches, and to support stable payments in disaster situations that don’t support network connectivity,” Samsung said.
Currently, central banks around the world are taking a keen interest in CBDCs and conducting research. Based on the results of the cooperation, Samsung and the BOK will continue to explore various ways to cooperate on developing a CBDC ecosystem in the international community, they said.
“We are very pleased to have developed the first offline CBDC technology for a central bank with Samsung Electronics,” BOK Senior Deputy Governor Lee Seung-heon said. “Through the cooperation, we look forward to Korea continuing to lead the way in offline CBDC technology, which is being actively researched by global central banks.”
“The collaboration with the BOK allowed us to apply Samsung’s advanced security technology to the digital currency space,” said Choi Won-joon, executive vice president and head of Samsung’s Mobile eXperience (MX) Division R&D office. “Based on our collaboration, we expect to make a significant contribution to the development of offline CBDC technology in Korea and globally.”
