The Central Bank of South Korea and Samsung Electronics reached an agreement to cooperate on central bank digital currency (CBDCs). Amidst the global shift towards CBDCs by major governments worldwide, the decision to cooperate is a big step.
Today, the Bank of Korea held a ceremony to sign a memorandum of understanding at the Samsung Digital City in Suwon. They have agreed to continue research on CBDC and cooperate in the offline payment sector. CBDSs are types of digital currencies that work on distributed ledger technology (DLT). Both parties will explore the possibilities of offline working of CBDCs. Also, Samsung has participated in South Korea’s 10 months long CBDC simulation research. The CBDCs simulation also discussed the retail trading aspect. According to reports, the Bank of Korea’s first stage of CBDC research tested primary functions like issuance, distribution, and redemption.
The recent Memorandum of Understanding (MOU) mainly inclined toward South Korea’s CBDC potential to conduct remittances and payments using near-field communication. It will only require Samsung devices instead of using the internet. According to the vice president of Samsung Electronics, Woo-Jon Choi, the collaboration will allow the tech giant’s knowledge in 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”, says the vice president of Samsung Electronics.
South Korea is one of the leading tech-savvy countries in the world which is currently leading in technical aspects. In December 2022, it was reported that the country is expected to use blockchain technology-based digital identification (ID) in place of physical cards by the year 2024. According to data from June 2021, the blockchain identification industry is anticipated to increase by over $3.58 billion by 2025, or a compound annual growth rate of 71%. Despite showing interest in CBDC technology, Samsung Electronics recently published guidelines to its employees to not use artificial intelligence (AI) in Samsung devices. It will be interesting to see the upcoming developments in CBDCs and related technologies in the future.