- Global tech giant, Samsung, collaborates with the Bank of Korea (BOK) to jointly research the possibility of offline payments.
- The two parties signed a memorandum of understanding (MOU) concerning the development and research of the CBDC.
- Samsung vice president Won-Joon Choi lauds the level of operation between both parties and expects successful results.
Being a participant in the 10-month-long second phase of the Bank of Korea’s simulation experiment analysis, Samsung has once again offered to collaborate with the country’s central bank as they research central bank digital currency (CBDC) offline payments.
On May 15, the Bank of Korea announced that it had entered a partnership with the famous tech giant company—Samsung—and it had signed a memorandum of understanding with Samsung dedicated to the potential of CBDCs issued by the BOK.
According to the report by KBS World, a local media outlet, the signing of the MOU by the two parties has geared them toward reducing the security risks when conducting offline payments via any of Samsung’s devices.
One of the significant purposes of this partnership is to ensure that transactions can still be made during emergencies when there is no internet for the users.
The Second Stage Of The BOK’s CBDC Research
In December 2021, the Bank of Korea completed the first stage of the CBDC research, which involved reviewing primary issuance, redemption, and distribution in a blockchain-based CBDC experiment environment.
According to the current status and critical considerations published in the BOK’s CBDC, the key focus of the second stage of the Bank of Korea’s central bank digital currency is an expansion of distribution processes, offline payments, purchase of digital assets, and support for cross-border remittance.
What is an MOU?
A memorandum of understanding (MOU) or a letter of intent (LOI) is a nonbinding agreement acknowledging the intentions and roles of the parties involved in signing the document.
The signing of the MOU by Samsung Electronics and the BOK is to research offline payments and remittance of CBDCs through NFC (Near Field Communication) on Samsung smartphones rather than requiring the internet to function.
Won-Joon Choi, the vice president of Samsung, announced that the partnership between the giant tech company and South Korea’s central bank enabled the tech company to apply its advanced security technology to the CBDC.
“Based on the partnership and cooperation on both ends, we hope to contribute to the development of worldwide CBDC technology significantly,” he said.
The Vice President of the Bank of Korea also commented on the collaboration between both powerful companies in the country, saying that it was important that South Korea’s central bank built the first offline CBDC technology for the bank with Samsung.
Conclusion
The collaboration between the Bank of Korea and Samsung may prove to be effective with the advanced security technology which Samsung provides for the development of the CBDC offline transactions.
