Samsung Is Exploring An 'offline' Digital Currency That Works With Galaxy Phones
- Samsung has announced that it has signed a memorandum of understanding with South Korea's central bank to conduct technical studies on the central bank's digital currency.
- Device-to-device payments can be made using near-field communication technology built into phones, Samsung says, enabling contactless payments.
- Countries from China to the US continue to explore and experiment with so-called CBCCs to make it easier for consumers to send money quickly.
© Contributed by CNBC A man walks past an advertisement for a Samsung Galaxy Z Flip4 smartphone at a Seocho building in Seoul on January 31, 2023.Consumer tech giant Samsung plans to launch a central bank digital currency in partnership with the Bank of Korea.
A South Korean electronics company has announced that it has signed a memorandum of understanding with the country's central bank to conduct technical studies on the digital currency.
Samsung says CBCC, which refers to a central bank-issued digital currency, will work "offline" and will be sent to Galaxy phone owners via a secure chip inside the devices.
Device-to-device payments can be made using near-field communication technology built into phones, Samsung says, enabling contactless payments.
Samsung said it developed a solution last year by applying NFC technology to CBBC. This allows users to make payments even without an internet connection, the company added.
In a press release released on Monday, Samsung said the company, along with the Bank of Korea, is “trying to explore how to mitigate the security risks associated with offline payments while maintaining secure transactions during emergencies. Even without an emergency network connection. ."
“We are thrilled to be the first central bank to develop standalone CBCC technology in partnership with Samsung Electronics,” Bank of Korea Governor Seung Hyun Lee said in a press release.
“We hope that after the implementation of this memorandum, the Republic of Korea will continue to be a pioneer in the field of autonomous CBCC technology, an area that central banks around the world are actively exploring,” he said.
“This partnership with Bank of Korea allows us to apply Samsung's cutting-edge security innovations to the digital currency industry,” said Won-Joon Choi, executive vice president of Samsung Mobile Experience.
“We hope that our cooperation will make an important contribution to the development of offline CBCC technology worldwide,” he said.
Countries from China to the US continue to explore and experiment with so-called CBCCs to make it easier for consumers to send money quickly.
China has already created a digital version of the Chinese yuan and is testing its CBCC in several cities, while the United States is carefully considering the possibility of issuing a digital version of the dollar and how it can work.
Some commentators question the convenience of issuing a CBDC using currently available money transfers and cryptocurrencies such as online banking and money transfer apps.
In addition, various privately developed digital currencies allow people to make short-term payments. But most tokens like Bitcoin are very volatile. Stablecoins are believed to be the solution to this problem, although governments are wary of tokens issued by private companies.
However, there are obvious business challenges when it comes to fast trading settlements. Due to the way the banking system works, merchants often take several days to process customer payments.
This is a critical moment that private companies and governments are hoping to address with new technologies, including blockchain and digital currencies.
