Samsung Electronics Partners with Bank of Korea to Create a Platform for CBDC

South Korean multinational conglomerate Samsung Electronics is all set to collaborate with the Bank of Korea (BOK) to establish the first-ever platform for a central bank digital currency (CBDC).

The Bank of Korea commenced the CBDC pilot project on July 28th, which also witnessed participation from Ground X, a technology company that focuses on integrating blockchain with other technologies in the market. Ground X is also a Blockchain subsidiary of Korea’s largest mobile platform Kakao.

The project revolves around exploring the advantages of a Central Bank Digital Currency that could enjoy convenient money transfers with high-end technology. The merger of two technology giants Samsung and Kakao will develop and monitor the payment systems, examine the money transfers and remittances between various nations, and look into the distribution of CBDC to help it work in virtual ecosystems. Samsung is working on this ambitious project to assess the possibility of the inclusion of such a blockchain-based system on its Galaxy mobile lineup.

The two pivotal sub-projects that crop out of this milestone undertaking are a) to test the possibility of payments being conducted offline through the Galaxy smartphones, b) to examine the possibility of sending CBDC remittances to other mobile phones, and bank accounts. The major reason behind roping in Samsung Electronics is to test the effectiveness of the digital currency with the Galaxy phone. Bank of Korea, on the other hand, prepares to undergo several changes in the payment settlement system to come up with a cutting-edge interface for financial undertakings.

Escor, which is a Samsung affiliate, will be evaluating the plan of action and will carry out the experiments with the CBDC. The primal objective of this venture is to build an alternative for physical currency in Korea. Several nations and their central banks are coming up with newer and advanced technology to develop CBDC. China’s digital yuan (E-CNY) is one of the many examples.

While Lee Ju-yeol, the Bank of Korea Governor has disapproved of the importance of cryptocurrency as opposed to real currency, this ambitious opening in the study of CBDC has promised BoK’s customers a modern, evolving central bank. Several other high-ranking officials in BoK have been known to dismiss crypto-assets and their ability to elevate the presiding financial systems. They claim that the assets have little value due to their ‘volatility’ in the real markets. Klayton, which is Kakao’s global public blockchain project, has also been roped in to feature as the main platform for its CBDC structure.