Bank of Korea Taps Samsung to Research Offline CBDC Use

South Korea’s central bank is teaming up with Samsung Electronics to test offline central bank digital currency (CBDC) transfers, the Korea Herald reported on Monday. Per the report, the transfers will be made completely offline using Samsung’s mobile devices without requiring cash, credit card info, or an internet connection.

Korea’s CBDC Doesn’t Require an Internet Connection, Cash, or Credit Card to Make Transfers

According to the Korea Herald, Samsung Electronics signed a memorandum of understanding with the Bank of Korea (BOK) to build an ecosystem for digital won. The two parties will begin researching an offline CBDC and use it to make wire transfers and payments via Samsung devices as part of the agreement.

The move comes after Samsung initially joined BOK’s CBDC pilot in 2022. Then, the electronics giant and BOK developed offline CBDC technology that allows device-to-device transfers and payments using near-field communication (NFC) technology even if neither sender nor the recipient is connected to the internet.

Namely, this CBDC design allows users to make transactions only with their Samsung mobile devices, without credit cards, cash, or an internet connection. The transfers are made possible by a chipset that is built into Samsung-made phones and includes security features.

“Based on this technology, the two sides plan to continue research to minimize the security risks associated with offline payments using Samsung’s Galaxy smartphones and watches, and to support stable payments in disaster situations that don’t support network connectivity.”

– Samsung said.

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Constant Surge in CBDC Interest

If their collaboration results are positive, the two parties said that Samsung and the BOK plan to continue working together to explore different options for developing a CBDC ecosystem in the international community.

The rising demand for digital money comes as CBDCs offer the potential for a more efficient, secure, and inclusive payment system while addressing concerns around financial stability, monetary sovereignty, and the declining use of physical cash. With this move, the BOK joins several global central banks that are doubling down on their CBDC efforts.

Just last week, the central bank of Canada issued a public consultation on the design of a Canadian digital dollar (CAD). In the paper, the Bank of Canada sought feedback on essential features the public believes the digital CAD should include. Similarly, even a developing country such as Montenegro partnered with XRP issuer Ripple to develop a CBDC or a national stablecoin.

Could we see more tech giants such as Samsung join forces with global central banks to help develop CBDCs? Let us know in the comments below.