Towards CBDC-based Machine-to-Machine Payments in Consumer IoT

The technological advancement of the Internet of Things (IoT) is a well-known phenomenon that mainly affects industrial sectors but also consumers in everyday life. The use of Consumer IoT, i.e. CIoT, devices is increasing, and they are paving the way for a Machine-to- Machine (M2M) communication that could highly enrich consumer services. In this paper we position ourselves in the narrowing gap between the world of CIoT and the world of money, and we explore the emerging interaction between the payment needs of a M2M Economy and the “new ways of payment”. Indeed, the advent of Dis- tributed Ledger Technology and cryptocurrencies has introduced a tech-oriented dynamism in the monetary and financial sphere. Accordingly, central banks all over the world have started investi- gations into digital fiat money , i.e., “retail” Central Bank Digital Currencies (CBDCs). Against this backdrop, we analyze the inte- gration of retail CBDC models into M2M and CIoT dynamics, while heeding regulation-by-design and compliance-by/through-design methodologies, and we propose a preliminary model of integration between a two-tier retail CBDC architecture and CIoT.