Samsung’s Contribution to the Bank of Korea’s CBDC Development
The Bank of Korea’s central bank digital currency (CBDC) initiative, which is set to launch by the end of July 2021, is gathering traction. The effort will be aided by electronics giant Samsung, according to the Korea Times.
The platform that will support the CBDC will be built by the company and the financial institution. In addition to Samsung, the Bank of Korea has enlisted the help of other private-sector partners, such as Ground X, a blockchain-based division of Kakao.
To back up its accusations, The New York Times cited an executive source:
Samsung Electronics has recently decided to participate in the BOK-led CBDC pilot project, under which interested parties will research the practicalities of the CBDC in a test environment.
The benefits of CBDCs and their potential to improve the country’s payment system have been discussed by representatives from Samsung and the Bank of Korea. According to the New York Times, Samsung and the Bank of Korea will test the “usability” of blockchain technologies on Samsung’s Galaxy smartphone.
Specifically, the Kakao consortium and Samsung Group’s two tech affiliates will launch a pilot program aimed at checking on money transfers and remittances between countries, issuing and distributing the CBDC, and monitoring how that eventually works in virtual environments.
Samsung To Put CBDC To The Test On Its Smartphones?
According to the report’s sources, the project would have two key priorities on the Samsung side: the ability to conduct payments to other devices and the option of conducting payments to other devices.
(…) payments via mobile phones using the digital currency with no internet availability, or to send CBDC remittances to other mobile phones or to other connected bank accounts.
The company’s IT segment and an associate called Escort will work together to achieve the goals. The procedures for the tests with the central bank digital currency (CBDC) will be handled by these entities, according to the Times.
Due to the volatility of the assets, high-ranking officials at the Central Bank of Korea appear to have disregarded cryptocurrencies and their potential to enhance present financial systems. China’s own digital currency, the e-CNY or digital yuan, has, however, raised worries among its Asian neighbors.
During the test phase, the CBDC development in South Korea will take place in a virtual environment. Samsung and the other project partners will look for flaws and issues, as well as the project’s technical constraints.
Later in the project’s life cycle, in mid-2022, it will focus on “offline payments,” e-commerce, remittances, and other applications. According to reports, the CBDC will include advanced privacy protections created in partnership with private banks.