Skip to main content

Cross-Border Payment and Settlement Fuels Blockchain

Across the globe, CIOs and CTOs will assess the potential benefits of distributed ledger technology applications that are empowered by purpose-built peer-to-peer networks. To date, the adoption and development of blockchain solutions have been somewhat problematic, due to a variety of complex challenges.

Regardless, organizations are forecast to spend nearly $6.6 billion on blockchain solutions this year -- that's an increase of more than 50 percent compared to 2020. Blockchain investments will see growth throughout the 2020-2024 forecast period with a five-year compound annual growth rate (CAGR) of 48 percent, according to the latest worldwide market study by International Data Corporation (IDC).

"This is an important time in the blockchain market as enterprises across markets and industries continue to increase their investment in the technology. The pandemic highlighted the need for more resilient, more transparent supply chains, healthcare delivery, financial services, and so much more, and enterprises around the world have been investing in blockchain to provide that resiliency and transparency," said James Wester, research director at IDC.

Blockchain Technology Market Development

There's growing interest and investment by corporations, financial institutions, and governments in areas previously viewed with some uncertainty -- such as cryptocurrencies, digital assets, central bank digital currencies, decentralized finance, and stablecoins.

The leading use case for blockchain in 2021 and throughout the forecast is Cross-Border Payments & Settlements, which uses distributed ledger technology to track, trace, and manage payments and settlements.

The second-largest blockchain use case is Lot Lineage or Provenance, which is used to verify the origin and authenticity of a product as it moves throughout the value chain. Other leading use cases include Trade Finance & Post Trade or Transaction Settlements, Asset or Goods Management, and Identity Management.

From an industry perspective, banking leads the way in blockchain spending, accounting for nearly 30 percent of the worldwide total in 2021. Banking will remain the top industry for blockchain spending throughout the forecast although its share of spending will diminish slightly by 2024.

According to the IDC assessment, the primary use cases for blockchain within the banking industry are Cross-Border Payments & Settlements and Trade Finance & Post Trade or Transaction Settlements.

The next largest industries for blockchain spending are process manufacturing and discrete manufacturing, which together account for more than 20 percent of all spending worldwide. The leading use case in both industries is Lot Lineage or Provenance.

Following the manufacturing industries are professional services, retail, and insurance, which rely on blockchain to trace the movement of payments and products. The industries that will see the fastest growth in blockchain spending over the forecast period are professional services (56 percent CAGR), state or local government (53.3 percent CAGR), and healthcare (52.7 percent CAGR).

From a technology perspective, IT services and business services (combined) will account for more than two-thirds of all blockchain spending throughout the forecast with IT services receiving slightly more investment over the forecast period.

Blockchain platform software will be the largest category of spending outside of the services segment and the fastest growing technology category overall with a five-year CAGR of 52.9 percent.

Outlook for Blockchain Applications Regional Growth

Spending on blockchain solutions in the United States will be nearly $2.6 billion this year, making it the largest geographic market, followed by Western Europe ($1.6 billion) and China ($777 million).

All nine regions covered by IDC analysts are predicted to see exceptional spending growth over the forecast period, led by China with a five-year CAGR of 54.6 percent and Central and Eastern Europe (50 percent CAGR).

That said, I've followed the blockchain market through the recent history of abundant hype and euphoria that has led to the current more realistic outlook. One of the most persistent challenges is the lack of people that have proven skills and experience with this technology. I anticipate that market growth will continue to be impacted by this significant obstacle to accelerated progress.

Popular posts from this blog

Big Data Analytics Revenue to Reach $215.7 Billion

Across the globe, more leaders seek actionable insight from the customer data they've stored in huge data lakes. Worldwide spending on big data and business analytics (BDA) solutions is forecast to reach $215.7 billion in 2021 -- that's an increase of 10.1 percent over 2020, according to the latest worldwide market study by International Data Corporation (IDC). Moreover, BDA technology investment will likely gain momentum over the next five years as the global economy recovers from the COVID-19 pandemic. The compound annual growth rate (CAGR) for global BDA spending over the 2021-2025 forecast period will be 12.8 percent. Big Data Analytics Market Development "As executives seek solutions to enable better, faster decisions, we're seeing relatively healthy BDA spending across all industries. Leveraging data for insights into everything from internal business operations to the customer journey is top of mind and of strategic importance," said Jessica Goepfert, vice

Warehouse Robot Deployment Gains New Momentum

The retail and wholesale back-office infrastructure market is being transformed by technology. The warehousing industry has accelerated automation efforts due to the increased order volume and labor shortages driven by the global pandemic. In addition to technology solutions such as handheld devices with enhanced capabilities, autonomous, collaborative, and mobile robots are proving to be the fastest-growing productivity-enhancing solution in the warehouse workspace. Commercial Robotics Market Development According to the latest worldwide market study by ABI Research, global commercial robot revenue in warehouses will have a Compounded Annual Growth Rate (CAGR) of over 23 percent from 2021 to 2030 and exceed $51 billion by 2030. "Mobile robots are at the heart of the warehouse robotics market and account for most shipments and revenue. These robots, made up of Autonomous Guided Vehicles (AGVs) and Autonomous Mobile Robots (AMRs), are being used to move goods within the warehouse a

Remote Working Drives Demand for Internet Access Solutions

High-speed internet access from home is essential to participate in the Global Networked Economy. The worldwide residential broadband service market reached a subscriber base of over 1.1 billion users in 2020 -- that's a 4 percent increase from the previous year. Clearly, the COVID-19 pandemic accelerated demand for broadband connectivity. The need for high-capacity residential broadband will remain, even post-pandemic. According to the latest worldwide market study by ABI Research, 5G Fixed Wireless Access (FWA) will be the fastest-growing residential broadband segment to increase at a CAGR of 71 percent, exceeding 58 million subscribers in 2026. Remote working, online learning, and virtual healthcare created new demand for high-speed broadband throughout 2020. The significant increase in the use of internet-based entertainment services also prompted broadband users to upgrade, while more households without broadband access subscribed for the first time. Residential Broadband Serv