# Zero-Knowledge Proof (ZKP) Authentication for Offline CBDC Payment System Using IoT Devices

arXiv: https://arxiv.org/abs/2603.03804 · HTML: https://mlsanity.com/paper/2603.03804/

## Key facts

- No citing papers in the map yet (data through 14 Oct 2026).
- Builds on 3 of its 16 references that are in the map.
- First posted on arXiv 4 Mar 2026.

## Builds on (most cited first, 3 of 3)

- [zk-IoT: Securing the Internet of Things with Zero-Knowledge Proofs on Blockchain Platforms](https://mlsanity.com/paper/2402.08322/) (2024)
- [PayOff: A Regulated Central Bank Digital Currency with Private Offline Payments](https://mlsanity.com/paper/2408.06956/) (2024)
- [Balancing Compliance and Privacy in Offline CBDC Transactions Using a Secure Element-based System](https://mlsanity.com/paper/2509.25469/) (2025)

## Abstract (arXiv)

Central Bank Digital Currency (CBDCs) are becoming a new digital financial tool aimed at financial inclusion, increased monetary stability, and improved efficiency of payment systems, as they are issued by central banks. One of the most important aspects is that the CBDC must offer secure offline payment methods to users, allowing them to retain cash-like access without violating Anti-Money Laundering and Counter-terrorism Financing (AML/CFT) rules. The offline CBDC ecosystems will provide financial inclusion, empower underserved communities, and ensure equitable access to digital payments, even in connectivity-poor remote locations. With the rapid growth of Internet of Things (IoT) devices in our everyday lives, they are capable of performing secure digital transactions. Integrating offline CBDC payment with IoT devices enables seamless, automated payment without internet connectivity. However, IoT devices face special challenges due to their resource-constrained nature. This makes it difficult to include features such as double-spending prevention, privacy preservation, low-computation operation, and digital identity management. The work proposes a privacy-preserving offline CBDC model with integrated secure elements (SEs), zero-knowledge proofs (ZKPs), and intermittent synchronisation to conduct offline payments on IoT hardware. The proposed model is based on recent improvements in offline CBDC prototypes, regulations and cryptographic design choices such as hybrid architecture that involves using combination of online and offline payment in IoT devices using secure hardware with lightweight zero-knowledge proof cryptographic algorithm.