Samsung will participate in the South Korean central bank’s digital currency project.
That is reported by the Korea Times, which says that the Bank of Korea (BoK) is working on implementing a pilot platform for a central bank digital currency (CBDC).
The project reportedly began on July 28 and is co-managed by Ground X, an affiliate of messaging platform Kakao specializing in blockchain-based technologies.
According to reports from The Korea Times, a Samsung executive familiar with the matter said:
“Samsung Electronics has recently decided to participate in the BOK-led CBDC pilot project, under which interested parties will research the practicalities of the CBDC in a test environment.”
The project aims to create more efficient and advanced payment and financial inclusion systems, and the company apparently wants to test the use of blockchain-based technologies. In fact, according to the executive interviewed by the Korea Times, two technology affiliates of the Samsung group (Samsung SDS and Escor) have created a consortium with Kakao to launch a pilot program for money transfers and remittances between different countries, the issuance and distribution of a CBDC, and the monitoring of how this would work in virtual environments.
It also appears that BoK plans to use Ground X’s blockchain platform, Klaytn, as the main architecture for its CBDC.
Samsung will test South Korean digital currency on Galaxy smartphones
A particularly relevant aspect reported by the same executive is that Samsung would plan to test the digital currency on its Galaxy line of smartphones, now extremely popular not only in South Korea.
According to the Korea Times, this decision would be partly due to the increasing success of the stablecoin.
In fact, stablecoins are as close as we can get nowadays to the digital currencies of central banks, probably even more similar to them than the original fiat currencies, of which CBDCs are nothing but the natively digital versions.
The success of stablecoins is now enormous, with more than $117 billion in total capitalization, more than half of which is represented by the Tether dollar (USDt) alone. Indeed, in particular, the most traded token on cryptocurrency markets is USDt, even more than bitcoin and ETH, and even more than the US dollar (USD) itself.
That shows that in some environments, at equal value, a blockchain-based currency attracts more users than traditional fiat currencies that have been in use for many decades, if not centuries, as in the USD case. Therefore a natively digital version of traditional fiat currencies could have its own market. However, e.g., from the point of view of fungibility and privacy, it will undoubtedly be much less effective than stablecoins.