The joint research initiative between Samsung Electronics and the Bank of Korea could potentially lead to the implementation of central bank digital currency (CBDC) based offline payments on Samsung Galaxy smartphones and smartwatches. This development comes as a continuation of a pilot project initiated in 2022, which focused on enabling device-to-device transfers through near-field communication (NFC) for CBDCs.
The new initiative aims to bypass challenges such as lack of network connectivity in South Korea’s remote areas and seeks to reduce card and cash payments within the country. Samsung’s research will primarily focus on minimizing security issues in offline payments when made through their Galaxy smartphones and smartwatches, as reported by The Korea Times. Lee Seung-heon, senior deputy governor of the Bank of Korea, expressed optimism about Korea continuing to lead the way in offline CBDC technology, which is being actively researched by global central banks.
However, not everyone is enthusiastic about this development. The crypto market community, in principle, opposes the implementation of CBDCs, even though they are based on blockchain technology, which is the foundation of cryptocurrencies. The main argument against CBDCs is that they could potentially lead to financial surveillance and increased centralization – aspects that stand in stark contrast to the decentralized nature of most cryptocurrencies. Furthermore, CBDCs might also encourage negative interest rates or financial exclusion for certain individuals.
On the other hand, proponents of CBDCs argue that they offer several benefits, such as improved financial stability, increased efficiency in cross-border transactions, and reduced reliance on physical cash. CBDCs could also provide central banks with better tools to implement monetary policy and combat money laundering or illicit activities.
In conclusion, the joint research initiative between Samsung Electronics and the Bank of Korea could result in CBDC-based offline payments being implemented on Samsung Galaxy smartphones and smartwatches. While this could bring significant benefits in terms of improved payment infrastructure and reduced reliance on physical cash, it also raises concerns among the crypto community regarding centralization and surveillance. As the world gradually shifts towards digital currencies and technological advancements, it remains to be seen how these concerns can be addressed while leveraging the potential benefits that CBDCs offer.
Source: Coingape
