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[Exclusive] Digital currency

Samsung Group joins Kakao in Bank of Korea’s digital currency project

South Korea’s central bank is making its very first step in potentially setting up the digital won

By Aug 04, 2021 (Gmt+09:00)

The Bank of Korea said it is open to all options and possibilities regarding the digital won project.
The Bank of Korea said it is open to all options and possibilities regarding the digital won project.

Samsung Group will be working together with Kakao Corp. on the digital currency simulation project led by South Korea’s central bank.

According to the Bank of Korea and Forbes on Aug. 4, Samsung Electronics Co. and Samsung SDS have joined the consortium of simulators spearheaded by Kakao’s blockchain arm Ground X for the central bank digital currency (CBDC) project. 

Last month, Ground X was selected by the Bank of Korea to run its CBDC initiative, also called the digital won project, beating Naver Corp.

The consortium and the Bank of Korea will carry out the simulation project from Aug. 28 to June next year. The scope of the project includes the CBDC’s issuance, distribution, remittances as well as payment in the virtual world.

Sources reported that Samsung Electronics will test whether the digital currency can be used freely on its Galaxy smartphones without an internet connection.

Specifically, Samsung is expected to test in a no-internet environment whether a Galaxy smartphone carrying the digital currency can transfer the money to another smartphone or device in contact with itself, or to another bank account linked to the device.

Samsung currently runs Samsung Pay, a digital wallet service in a number of selected countries.
Samsung currently runs Samsung Pay, a digital wallet service in a number of selected countries.

Another Samsung unit, Samsung SDS, will provide technical advice to the consortium. S-Core, a digital consulting arm of Samsung SDS will be responsible for the CBDC issuance part of the project. Apart from the Samsung affiliates, the consortium also includes KakaoBank Corp., Kakao Pay Corp., a US-based blockchain firm ConsenSys, and a Korean blockchain startup Onther.

The central bank plans to conduct the CBDC simulation in two stages. In the first stage, it will create a simulation environment and check the CBDC’s basic functions. In the second phase, the bank will test the CBDC’s extension functions and examine some key privacy issues.

The Bank of Korea added that its pilot project will use Ground X’s Ethereum-based blockchain platform, Klaytn, as the ledger of the digital won.  

“We are open to all options and possibilities regarding the direction and methodology of our CBDC project,” said a Bank of Korea representative.

Write to Ik-hwan Kim at lovepen@hankyung.com

Daniel Cho edited this article.
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