Smart cities are urban spaces that leverage Information and Communication Technology (ICT) to enhance economic growth, mobility, environment, living standards, governance, and citizen engagement through various digital infrastructures and services. This concept paves the way for the rapid expansion of the Internet of Things (IoT) devices within these ecosystems, resulting in the generation of vast amounts of data due to the interconnectivity between critical infrastructures. However, accumulating such large volumes of data introduces significant security and privacy risks, including unauthorised access, data manipulation, and surveillance. To address these challenges, blockchain technology has emerged as a decentralised and transparent solution for secure data management. Despite its potential, existing literature often overlooks the importance of physical-layer security, leaving IoT devices vulnerable to hardware-based attacks. This research proposes a novel security framework that integrates blockchain with Physical Unclonable Functions (PUFs) to enhance device-level security. By leveraging the inherent unpredictability of PUFs, the framework ensures that only trusted devices can communicate within smart city networks, thereby strengthening resilience against cyber threats. This work presents a scalable security solution that benefits policymakers and digital citizens, contributing to the sustainable development of secure and interconnected smart cities.