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Samsung Explores Offline Digital Currency for Galaxy Phones

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South Korean electronics firm Samsung is exploring the chance of releasing a digital currency in partnership with the Bank of Korea. The tech company has entered into a memorandum of understanding (MOU) with the central bank to conduct technical research on this potential currency.

What Is This Current Development and Why It Matters?

Samsung has announced the development of a central bank digital currency (CBDC), a digital currency leading financial institutions issue that people can send offline between Galaxy smartphone and smartwatch owners. Thanks to a secure chip in the devices and near-field communication technology, it’s now possible, which allows for contactless payments. The electronics company has already developed a solution for applying near-field communication (NFC) technology to CBDCs, allowing users to make payments without an internet connection.

What Are Officials’ Thoughts on the Partnership?

Samsung and the Bank of Korea have announced their plans to continue researching ways to reduce offline payments’ security risks to ensure users can conduct transactions reliably in emergencies when network connections are unavailable. The Bank of Korea has expressed satisfaction with being the first central bank to work with Samsung Electronics to develop offline CBDC technology.

What Are the Tech Officials’ Thoughts on the Collaboration?

Samsung’s executive vice president of the mobile experience Won-Joon Choi is hopeful that the Republic of Korea will maintain its leadership in offline CBDC technology by establishing an MOU. The high-ranking official states that central banks globally are currently exploring this technology. 

Choi further noted that the collaboration with the Bank of Korea has allowed Samsung to apply its advanced security innovations to the digital currency field, and they expect their partnership to contribute significantly to the development of global offline CBDC technology.

Who Are the Other Countries Experimenting with the CBDCs?

Several nations, including the United States and China, are progressing in their research and testing of CBDCs to make instant money transfers more accessible to consumers. China has already developed a digital version of its currency and is testing it in various cities. Meanwhile, the United States is also exploring introducing a digital version of the dollar and determining how it would operate.

What Are Commentators’ Thoughts on Officials Implementing Digital Currencies?

Some experts question the usefulness of issuing CBDCs because current methods like online banking, money transfer apps, and cryptocurrencies make sending money quick. While some privately developed digital currencies allow quick payments, most are unstable and fluctuate wildly. Experts have also suggested implementing Stablecoins as a solution, but government officials are hesitant to accept tokens that private companies created. 

How Will This New Project Challenge Businesses?

Despite advancements in technology, businesses still struggle to settle transactions quickly. The current banking system can delay the processing and settlement of payment for several days. Companies and governments are exploring new technologies like blockchain and digital currencies to remedy this issue.

What Is Samsung?

Samsung is a South Korean tech corporation that produces various electronic devices, including appliances, digital media devices, semiconductors, memory chips, and integrated systems. Lee Byung-Chull founded the company as a grocery trading store on March 1, 1938. From there, Samsung became a prominent technological name. Samsung also produces about a fifth of South Korea’s total exports.

What Is the Bank of Korea?

Officials initially The Bank of Korea in 1950 with a capital of 1.5 billion won, but is currently a particular juridical person without money. This financial institution aims to pursue price stability and performs typical central bank functions like issuing banknotes, implementing monetary policy, and managing foreign exchange reserves. It also oversees payment and settlement systems and supervises financial institutions.

Digitizing People’s Money

While Samsung’s new development with The Bank of Korea can innovate how people transfer money, others remain skeptical due to security concerns. What are your thoughts on the tech company’s partnership with Korea’s central bank? Let us know.

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