Samsung and Bank of Korea Collaborate to Explore Offline Central Bank Digital Currency for Seamless Transactions

Samsung signs MoU with the Bank of Korea to research and develop an offline Central Bank Digital Currency (CBDC) that enables secure payments between Galaxy smartphone and smartwatch users, aiming to enhance reliability in emergency situations.

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Samsung is exploring the possibility of creating a digital currency in cooperation with the Bank of Korea, the central bank of South Korea.

In this context, the South Korean electronics giant has signed a memorandum of understanding with the country’s central bank to conduct technical research.

According to Samsung, a CBDC, i.e. a digital currency issued by a central bank (Central Bank Digital Currency), would operate “offline” and could be used between owners of the company’s Galaxy smartphones and smartwatches, thanks to a secure chip.

On a technical level, payments could be made between devices through the use of near-field communication technology, which is built into smartphones to enable contactless payments.

It is noted that Samsung last year developed a solution that applies NFC technology to CBDCs, which makes payments possible even if users do not have an internet connection.

As Samsung highlights in a statement, together with the Bank of Korea, it will “continue to explore how to minimize security risks associated with offline payments to support reliable transactions in emergency situations even without network connections.”

For its part, the Bank of Korea, through its deputy governor, expressed its delight at being the first central bank to deploy offline CBDC technology in partnership with Samsung Electronics.

It pledged to continue to lead efforts to develop this technology, which it said is being actively explored by global central banks.

Indeed, many countries from the US to China are experimenting with so-called CBDCs in an attempt to make offline direct transactions easier.

Beijing has already created a digital version of the yuan and is testing its CBDC in several cities, while similar efforts to launch a digital version of the dollar are being made by the Americans.

However, market representatives are not yet convinced of the necessity of such a practice, given the relative ease of making transfers using currently available methods, such as online banking and money transfer applications.

At the same time, there is always the adversary of cryptos, which have become more and more widespread in recent years, despite the objections of state bodies around the world.

The real “thorn” according to analysts, for both digital currencies and cryptos, is that with today’s data it often takes days for payments for those using them to actually be settled by the traditional banking system.

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