Guest Commentary by Prof. Dr. Philipp Sandner

Autonomous payments by machines

In the realm of the Internet of Things, self-driving cars will refuel autonomously, refrigerators will order groceries independently, sensors will sell data and machines will order their own spare parts. However, all of this requires a new payment infrastructure: A blockchain-based euro. Companies need to address this important facet of Industry 4.0 and must initiate suitable projects.

It is estimated that by 2025, more than 20 billion devices will be connected to the internet – around three times the number of people currently living on earth. These devices and machines are becoming increasingly intelligent and independent: In the Internet of Things (IoT) and in the context of Industry 4.0, sensors measure data and stakeholders perform actions – to a large and increasing extent these functions are completed by means of automation. The interaction between new technologies such as artificial intelligence, robotics and blockchain makes autonomous action a possibility.

Sooner or later, some of these devices will also be connected to payment transactions. Automated payment processes by means of smart contracts are an important element of this development – after all, the focus is not simply on the payment transaction itself, but rather on integrating payments into a business logic. Smart contracts translate the business logic into if-then functions, thereby facilitating substantial automation. This will put the machines of the future in a position to make payments autonomously, offering companies considerable efficiency benefits. For this to happen, the euro needs to make its way onto the blockchain system.


In this context, blockchain technology not only presents the opportunity to network companies, people and machines, but also guarantees data integrity and as such will form the backbone of the “machine economy”. The most appropriate route is to equip millions or billions of devices with a computer chip and then with a wallet, so that a device can receive (revenue) and transfer money (costs) automatically. This will take place in euros in the majority of cases, as this avoids any need for currency conversion in accounting, as well as any exchange rate risks.

Blockchain technology ensures
data integrity and therefore forms
the backbone of the machine economy.

Those familiar with the technology cannot envisage an economy that doesn’t involve a blockchain-based euro. This will be particularly important for European industry, where companies issue invoices in this currency and also use it for their bookkeeping entries. At this moment experts agree that it is impossible to envisage a world in which automotive manufacturers such as BMW would issue invoices in a highly volatile cryptocurrency such as bitcoin: The general acceptance of the currency as a means of payment is too low, and the regulatory obstacles are too substantial. Euro banknotes – and also US dollars or Swiss francs – represent value, just as stocks, property and other assets do. Currently, we have platforms for euro payment transactions, and other, separate systems such as silo-type IT systems which can be used for securities trading. Only a blockchain system is capable of mapping different asset types in an integrated manner, without giving rise to new silo structures. When used in this way, blockchain is understood as a Distributed Ledger Technology (DLT) system. When organizing account management from a technical perspective, a blockchain network increases efficiency for several reasons: The distributed structure means it breaks down silos, increases data integrity and creates trust through transparency and traceability.


Blockchain technology plays a decisive role when it comes to Industry 4.0, and with this in mind, corporate decision-makers should intensively focus on this important aspect of the IoT. Sensors that sell data, machines that independently order spare parts, self-driving cars that refuel autonomously – all of these will become possible with a euro that is based on blockchain. FinTechs and banks are already working on solutions in this area, and if companies wish to survive as the technological transformation advances, they would be well advised to allocate budgets and initiate relevant projects.

PROF. DR. PHILIPP SANDNER is head of the Frankfurt School Blockchain Center (FSBC) at the Frankfurt School of Finance & Management, which advises companies about blockchain activities. He is a member of the FinTech Council of the German Ministry of Finance and of the European Union’s Blockchain Observatory, and is also a founding member of the German Blockchain Association, the International Token Standardization Association (ITSA) and the Multichain Asset Managers Association. His main areas of focus include crypto assets, Distributed Ledger Technology and euro on ledger.

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