A recent statement by Samsung Electronics confirmed entering into a partnership with the Bank of Korea (BOK) in a coordinated central bank digital currency (CBDC) research. The initiative seeks to reinforce BOK’s efforts in conducting studies to advance the country’s CBDC ecosystem.
Samsung Collaborating with BOK in Offline CBDC Project
The South Korean electronics giant confirmed signing the memorandum of understanding in a meeting in its Suwon headquarter. News of the partnership appeared in a Korea Herald publication on May 15 that the two parties would advance the study of CBDC issuance and collaboration in offline payment.
The partnership portrays the pivotal input that private sector firms have to expedite the rollout of CBDCs. CBDC involves a digital currency that various central banks are exploring for their viability in facilitating transparent, secure, and speedy transactions.
South Korea, through the BOK efforts, is set to become the pioneer country to pursue offline CBDC technology. During the brief session, BOK Deputy Governor Lee Seung-Heon lauded the partnership as the basis for delivering relevant offline CBDC technology.
Bank of Korea to Leverage Samsung’s Existing Infrastructure in Pursuing Offline CBDC Project
Lee added that BOK is set to leverage the tech expertise of Samsung Electronics to enable Korea to pursue offline CBDC technology. Tapping into Samsung resources yields a unique starting point, unlike other central banks pursuing the offline CBDC project in-house.
The inclusion of Samsung Electronics in the offline project is unsurprising, given its previous engagement in the BOK-supervised CBDC pilot project. Samsung representatives indicated that the offline CBDC technology to execute device-based transfers.
Samsung representatives lauded that offline tech would execute payments using near-field communication (NFC). The tech ensures successful transfers even when the transacting devices lack an internet connection. The transfers rely upon the inbuilt chipset within Samsung’s mobile devices, which is also fitted with advanced security features.
Chipsets in Galaxy Series to Execute Transactions Offline
The memorandum of understanding signed on May 15 indicates that the collaborative efforts will orient towards enabling users complete payments from their Samsung devices. In particular, the MOU identifies users of Galaxy Watch and smartphones who would seamlessly execute the payments even when the network is disrupted.
Choi Won-Joon, the executive vice president of Samsung’s Mobile eXperience, confirmed that the existing devices have superior security technology capable of hosting digital currency transactions. He added that cooperation could dictate offline CBDC tech usage growth globally.
A notable achievement is the relation of an inbuilt chipset capable of supporting digital currency transactions. It underscores the superiority of Samsung’s devices. Two years ago, the company confirmed adding support features for the third-party crypto hardware wallets for Ledger Nano X and Nano S within its Galaxy series.
US Political Leaders Opposed to CBDC Usage
BOK’s partnership with Samsung coincides with a period when state-backed assets are attracting increased scrutiny globally. Recently, Democratic politician Robert F. Kennedy Jr supported the decision by Florida Governor Ron DeSantis to illegalize CBDC. The two leaders opposed CBDCs, citing privacy concerns.
DeSantis later signed a bill prohibiting centralized digital dollars within the Sunshine State. Senator Ted Cruz of Texas recently criticized CBDCs as utilizing a vulnerable design that will ultimately erode Bitcoin’s value.
Quant Chief Executive Dismisses Alleged Vulnerability of CBDCs
Quant chief executive Verdian indicated that privacy concerns perceived in CBDCs often are overstated. The executive ruled out that the central bank would continuously scout for individual transactions. He indicated that the central bank hardly shows interest in the individual’s spending.
In his address during the recently concluded Crypto and Digital Assets Summit, Verdian was optimistic that CBDCs would attract similar know-your-customer and antimony laundering laws. The regulations would apply similarly as administered to the other money forms intermediated by the commercial banks.
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