Samsung is teaming up with South Korea's central bank to get a digital currency transaction infrastructureup and running.
South Korea’s Samsung Electronics is to participate in a central bank digital currency (CBDC) project led by the Bank of Korea (BoK), which will focus on remittances between countries. The goal is to assess the benefits of a CBDC to make money transfers more efficient and bolster financial inclusion. Samsung expects to test the user experience of blockchain-based systems on the company’s range of Galaxy smartphones.
The BoK began its CBDC pilot program in July, with co-management by Ground X—the blockchain affiliate of messenger-platform behemoth Kakao. The project consists of two phases, the first of which will run until December. The second phase, likely to commence in January, will test real-time transactions and settlements.
One of the key issues facing CBDCs in mobile applications is whether it is possible to make payments without internet connectivity. Samsung is charged with addressing the issue as well as exploring the viability of sending CBDC remittances to other smartphones or connected bank accounts.
The BoK’s interest in a digital currency is in marked contrast to its stance on cryptocurrencies. Previously, BoK Governor Lee Ju-yeol poured cold water on the value and role of crypto assets.
Central banks around the world are pursuing pilot CBDC projects, with China reportedly at an advanced stage with its digital yuan, or E-CNY, which some critics allege may be a proxy for skirting US sanctions.