Samsung Electronics and the Bank of Korea have partnered to spearhead research and innovation in offline central bank digital currency (CBDC) technology. The collaboration seeks to eliminate internet dependency by introducing seamless offline payments. Both entities will conduct joint research aimed at catalyzing the development of a CBDC ecosystem.
Samsung had initially ventured into the Bank of Korea’s CBDC project in a 2021 pilot program co-managed by blockchain platform Ground X. The tech giant has since achieved a remarkable milestone with the successful development of offline CBDC technology. Near Field Communication (NFC) is the short-range wireless technology that enables devices of both sender and receiver to communicate directly without an internet connection.
Samsung’s phones and tablets include an Embedded Secure Element (eSE) chipset, providing a safe and secure storage for these CBDC transactions. In June 2020, the Bank of Korea established a legal advisory panel to examine potential regulatory challenges associated with the issuance of a CBDC. Their joint research’s outcome could serve as a virtual compass, influencing future initiatives aimed at exploring and establishing global CBDC ecosystem cooperative pathways.
Building on the cooperation’s outcomes, Samsung and the Bank of Korea have expressed their intent to further explore collaborative opportunities for developing a CBDC ecosystem internationally. The latest partnership focuses on enhancing security and minimizing threats in offline payments using Samsung Galaxy devices, and aims to guarantee a resilient payment system during situations where network connectivity is compromised.
Choi Won-Joon, executive vice president and head of R&D at Samsung Mobile, emphasized Samsung’s significant contribution to the development of offline CBDC technology in Korea and globally. The insights gained may shape forthcoming initiatives focused on exploring and establishing local and international cooperation for the development of the global CBDC ecosystem. Moreover, Samsung and the Bank of Korea’s collaboration may act as a valuable reference for other countries looking to adopt CBDCs in their financial systems.
However, skeptics may argue that complete dependence on technology could lead to potential security risks or technical failures. In the case of CBDCs, it is essential to have a robust infrastructure that can withstand potential cyber-attacks and guarantee user privacy. It remains to be seen whether Samsung and the Bank of Korea can effectively address these concerns and create a reliable CBDC network resilient to potential threats.
Source: Blockworks
