Central bank digital currencies, or CBDCs, are gaining attention as a potential solution for modernizing payment systems around the world. Unlike traditional currencies, CBDCs are digital assets issued and backed by a central bank.
Samsung Electronics and the Bank of Korea—South Korea’s central bank—will collaborate on central bank digital currency (CBDC) research for offline payments. Both organizations took part in a recent ceremony where they signed the memorandum of understanding (MOU) at Samsung Digital City in Suwon.
This is Samsung’s second participation in studies conducted by the Bank of Korea, the first being a 10-month CBDC simulation experiment to research the use of CBDCs in retail. The very first stage tested functions at the basic level, including CBDC’s issuance, distribution, and redemption.
The newest research will test the capabilities of South Korean CBDCs to manage remittances and payments, using near-field communication (NFC) within Samsung mobile devices, without having to use the internet. All transactions take place in the embedded Secure Element (eSE) within Samsung’s mobile devices.
To further enhance security, Samsung has earned hardware certification for the Security International Common Criteria CC (Common Criteria) EAL (Evaluation Assurance Level) 6+ grade.
“It is very meaningful that we developed the first offline CBDC technology for a central bank together with Samsung Electronics. I look forward to getting out,” said Lee Seung-heon, Vice President of the Bank of Korea in a statement.
Vice President Choi Won-jun, head of development at Samsung Electronics’ Mobile Experience (MX) Division, also added that “through collaboration with the Bank of Korea, we were able to apply Samsung Electronics’ high-level security technology to the digital currency field. Based on cooperation between the two companies, we expect to be able to make a great contribution to the development of global offline CBDC technology.”
With physical banknotes on the decline worldwide, it’s no wonder why many governments around the world are exploring the use of digital currency.
