Samsung and BOK will continue to explore new ways of developing a CBDC ecosystem and leverage the NFC technology to power offline CBDC payments.
The latest development in the crypto space is that South Korean tech giant Samsung Electronics has decided to work with the central bank – Bank of Korea – in order to build an ecosystem for the offline payments of the central bank digital currency (CBDC).
Both players have signed a memorandum of understanding (MoU) at Samsung’s headquarters in Suwon, Gyeonggi Province. As we know, some of the top central banks across the world have already started with CBDC pilots and the Bank of Korea is also working in this regard.
As part of the agreement, both Samsung and BOK will continue to conduct research on the CBDC and will specifically focus on its offline use. Last year, both these players had already joined hands for conducting a CBDC pilot. Back then, they also developed an offline CBDC technology allowing device-to-device transfers and payments using near-field communication (NFC) technology. This would be possible even when senders and recipients’ transaction devices are not connected to the internet.
Thus, people will be able to make transactions using their Samsung mobile devices and with no cash or credit cards. This would facilitate CBDC payments even in areas with no internet connections. Sending and receiving money will be possible through a built-in NFC chipset present in Samsung smartphones, equipped with special security features. Speaking on the development, Choi Won-joon, executive vice president and head of Samsung’s Mobile eXperience (MX) Division R&D office said:
“The collaboration with the BOK allowed us to apply Samsung’s advanced security technology to the digital currency space. Based on our collaboration, we expect to make a significant contribution to the development of offline CBDC technology in Korea and globally.”
South Korea Focusing on Its CBDC
As said, central banks across the world have been putting their focus on introducing CBDCs. Samsung and BOK have agreed that both players will explore different ways to cooperate in developing a CBDC ecosystem in the international community.
By leveraging the NFC technology, the two sides will continue research to minimize the security risks associated with offline payments using Samsung’s smart devices. With NFC, Samsung plans to offer stable CBDC payments in areas with no network connectivity.
“We are very pleased to have developed the first offline CBDC technology for a central bank with Samsung Electronics. 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,” said BOK Senior Deputy Governor Lee Seungheon.
Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.