Blockchain spending projected to reach almost $12 billion by 2022: report
The United States will be responsible for more than one third of global DLT spending over a five year period.
A new research report has forecast spending on blockchain solutions will increase to $11.7 billion by 2022.
The Worldwide Semiannual Blockchain Spending Guide released by International Data Corporation (IDC) suggests that blockchain spending will rise at a compounded annual growth rate (CAGR) of 73.2% over the course of the 2017-2022 forecast period.
Globally, blockchain spending is anticipated to hit $1.5 billion in 2018, twice as much as was spent last year.
The report found that the United States will be responsible for the biggest investments, accounting for more than one third (36%) of total spending over the aforementioned five year period. Western Europe will be the next largest region for blockchain spending, followed closely by China and Asia/Pacific (APAC).
The spending guide revealed that Japan (108.7%) and Canada (86.7%) are expected to have the highest CAGRs.
Of the industries that will lead the charge in spending, the financial sector is anticipated to invest $552 million in blockchain technologies throughout 2018, encouraged by accelerated adoption in the banking sector.
Over the last year, a number of banks have tested, trialed and employed distributed ledger technology (DLT).
In June, South African Reserve Bank (SARB) released a report on Project Khokha, a successful proof of concept trial of a blockchain-powered enhanced payments system. The trial also involved a number of other banks.
A global blockchain trade finance platform, supported by tech giant IBM, banking firm UBS, Canada’s Bank of Montreal (BMO) and others, successfully completed its first live corporate client transactions in mid-April.
Distribution and services will see healthy investments from retail and professional services at $379 million in 2018, while manufacturing and resources are expected to spend $334 million over the course of the year.
In the US specifically, the distribution and services sector will finance the largest blockchain investments.
Globally, the report found that the fastest growth among the various industries for blockchain spending will be seen in process manufacturing (78.8% CAGR), professional services (77.7% CAGR) and banking (74.7% CAGR).
Use cases that will inspire the most spending will be cross-border payments and settlements ($193 million), lot/lineage provenance ($160 million) and trade finance and post-trade/transaction settlements ($148 million).
IT services and business services will account for around 70% of all blockchain spending over the five years. Blockchain platform software and security software will be fast-growing industries, in terms of spending.
Research released by Moody’s Investor Service in April revealed how blockchain technology could potentially improve the United States’ housing industries and significantly diminish costs for the mortgage sector.
A significant number of banks and financial institutions have tested and utilize Ripple’s blockchain technology.