The Bank of Korea and Samsung Electronics on Monday have joined hands to develop Central Bank Digital Currency technology that enables transactions to be made without internet access.

The two sides signed a memorandum of understanding at Samsung’s headquarters in Suwon, Gyeonggi Province to strengthen their partnership on the development of CBDC, a form of digital currency issued by the central bank, as well as a solution for offline transactions using the virtual money.

Samsung Electronics had participated in the two-part mock testing of CBDC held by the BOK last year. It worked out an offline CBDC technology which allows transactions and payments between mobile devices through near field communication without online connection, using the tech giant’s security chip, called embedded Secure Element.

The two sides will continue to work on enabling users to access transactions and payments through Samsung’s Galaxy smartphones and Galaxy Watch even in disaster situations when online network cannot be accessed.

Bank of Korea Deputy Governor Lee Seung-heon and Choi Won-joon, executive vice president and head of the mobile research and development office at Samsung’s Mobile eXperience division, attended the event.

“It is meaningful that (the BOK) was the first to come up with the offline CBDC technology with Samsung Electronics," Lee said. "We hope that Korea can take the lead in offline CBDC technology through this memorandum, as central banks across the world are actively working on it.”

"We were able to apply Samsung Electronics' advanced security technology on digital currency through cooperation with the BOK," Choi said. "Through the two sides' cooperation, we can attribute the growth of global offline CBDC technology."