In a strategic pivot toward the future of finance, South Korean technology titan Samsung has joined forces with the country’s central bank, the Bank of Korea (BOK), to delve into the field of Central Bank Digital Currencies (CBDCs).
This groundbreaking partnership aims to leverage blockchain technology and distribute a digital currency issued directly by central banks, a concept gaining traction worldwide.
Samsung and BOK: Pioneering in CBDC research
The memorandum of understanding between Samsung and BOK, signed ceremoniously at Samsung Digital City in Suwon, is a firm commitment to CBDC research and the optimization of offline payment systems.
This collaboration’s genesis can be traced back to the tech giant’s involvement in the BOK’s second phase of a pilot study on CBDCs. The tech giant facilitated transfers and payments between devices through near-field communication (NFC), even in the absence of an internet connection.
This alliance’s primary focus is to enhance the security of offline payments made via Samsung’s smartphones and smartwatches, thereby ensuring reliable transactions even in disaster situations lacking internet connectivity.
Samsung’s advanced technological prowess plays a pivotal role in this endeavor, as the company seeks to apply its high-level security technology to the digital currency arena.
Exploring offline capabilities of CBDCs
The Bank of Korea, together with Samsung, is determined to delve deeper into the offline capabilities of CBDCs. The BOK’s 10-month simulation experiment research on CBDCs, where the company also lent its expertise, investigated the retail use of these digital assets.
The study initially tested rudimentary aspects such as the issuance, distribution, and redemption of CBDCs.
The most recent memorandum aims to explore the potential of South Korea’s CBDC to execute remittances and payments using near-field communication on Samsung mobile devices, independent of internet access.
Samsung Electronics Vice President, Won-Joon Choi, expressed his optimism about the alliance, stating, “Based on cooperation between the two companies, we expect to be able to make a great contribution to the development of global offline CBDC technology.”
Secure digital currency transactions
In an effort to ensure secure transactions, Samsung has secured hardware certification for the security international common criteria evaluation assurance level six grade.
The certification includes seven levels of security functional requirements and is the highest level of security. Such a high-security level is quintessential for secure digital transactions and for gaining user trust in this new form of currency.
Samsung’s MoU with the Bank of Korea symbolizes a vital step toward the realization of secure wire transfers and payments through digital currency issued by the central bank.
This innovative form of transaction will be available on Samsung Galaxy smartphones and smartwatches, signaling a potential revolution in the way transactions are conducted.
This collaboration between Samsung and the Bank of Korea is a significant stride toward realizing the global potential of offline CBDC technology.
By ensuring secure transactions even in the absence of an internet connection, this partnership could set the benchmark for the future of digital finance.
As the world progressively embraces digital currencies, the tech giant’s venture into CBDC research could mark a pivotal milestone in the evolution of global finance.
