According to CoindeskKorea, a crypto publication operated by mainstream media outlet Hankyoreh, Samsung Electronics is reportedly developing an Ethereum-based ERC20 token and is currently in the process of creating a mainnet.
A source of the publication within Samsung Electronics said that the blockchain task force of the company has already tested several versions of a blockchain protocol on top of Ethereum.
“Blockchain task force made several models and are evaluating [them]. There are already several platforms that are functioning after some internal tests,” the source told CoindeskKorea.
The report comes two months after Samsung Electronics introduced the Samsung Blockchain Wallet, essentially an ERC20 wallet featured on its flagship Galaxy S10.
Samsung Integrating a Crypto Wallet Now Makes Sense
When Samsung first released its crypto wallet in February, some investors were taken aback by the fact that the device currently does not support a bitcoin wallet service and is primarily focused on Ethereum.
“Galaxy S10 is built with defense-grade Samsung Knox, as well as a secure storage backed by hardware, which houses your private keys for blockchain-enabled mobile services,” the company said.
Some also pondered the motive behind Samsung’s rush towards integrating a crypto wallet as even smaller smartphone makers with the exception of HTC had not integrated a fully functioning crypto wallet feature.
If Samsung has been developing an ERC20 token and a blockchain protocol around it as suggested by local reports, then it is sensible for the company to integrate a cryptocurrency wallet to provide an easy-to-use platform for users.
How Would Samsung Launch a Token When Policies in South Korea Prohibit ICO?
In South Korea, companies are not allowed to issue tokens via initial coin offering (ICO) and investors cannot invest in domestic ICO projects.
As such, companies have moved to overseas markets in the likes of Japan to conduct private token sales to bypass the regulatory frameworks imposed by the local financial companies.
For a company like Samsung, it would most likely not be able to circumvent local regulations because of the immense impact the company has on various sectors in South Korea.
Any action taken by the company in an emerging market like crypto could set a precedent for the rest of the industry, which may lead the company to be more cautious with its operations.
A company insider told local publications that due to the policies in place, the company is gearing towards a private blockchain in a business-to-business (B2B) route but no plans are finalized as of yet.
The source said:
Currently the company is considering a private blockchain with a B2B approach but nothing is set in stone. In the long-term, the company could shift to a public blockchain but as of now, the company is likely to go with a public and private hybrid-type blockchain.
It Could Take a Long Time
Although South Korea is known to be a pro-crypto and pro-blockchain country, many areas within the global cryptocurrency sector remain untouched by the local authorities.
In regards to ICOs, for instance, it is unclear whether local companies could establish subsidiaries in overseas markets and conduct token sales abroad to circumvent regulatory frameworks.
Samsung is expected to wait for the authorities to clarify policies around the crypto sector before comfortably engaging in the space.
“The market is anticipating the launch of Samsung Coin but the direction is not finalized,” the insider reportedly said, suggesting that regulation is the biggest hurdle for the company.
The source also added that the involvement of Samsung Pay, at the current juncture of the project, is uncertain and as of now, Samsung Pay is not directly associated with the project.