In its latest projection, International Data Corporation (IDC) has predicted that total spending on the blockchain and its related solutions in the region of Asia Pacific will reach around $523.8 million in the year 2019. In 2018, the spending on the blockchain was pegged at $284.8 million, and the comparison translates into an increase of 83.9% on a year-over-year basis. Of note is the fact that this number excludes the contribution from Japan which is considered as one of the leading countries in the cryptocurrency and blockchain adoption in the world. The agency also predicted that the total blockchain spending in the Asia Pacific region will grow at 77.5% compounded annual growth rate (for five years) between 2018 and 2022 and expected to reach $2.4 billion by 2022.
Providing further details in this regard, Ashutosh Bisht, who is heading the position of senior research manager at IDC’s wing of customer insights and analysis, said that the blockchain technology is based on seven principles including the integrity of the network, high safety and security, data and user privacy, and value incentive among others. More industries are adopting blockchain as the technology has matured over the years with the time period from conceiving the blockchain application to its actual development has come down. In fact, blockchain has reached an infection point especially in the financial domain which contributes around half of the total spending on the technology.
From the perspective of the financial sector, IDC expects the total spending on blockchain this year will be around $249.8 million, and the sum will be primarily contributed by banks, financial institutions, investment firms, financial technology startups, and insurance industry. The contribution from the manufacturing and retail sector are also going to be prominent and estimated to be pegged around $95 million and $96 million respectively. However, it is the infrastructure and service/distribution sector which will witness the fastest CAGR for the five years at 99.6% and 83% respectively for the blockchain spending from 2018-2022.
Trade settlements/finance and cross-border transactions are the two most used cases of blockchain that will attract maximum investment in 2019 up to the tune of $82.1 million and $ 79 million respectively. Again, the banking sector will take the lead while investing in both of these blockchain cases as the financial sector continues to remain a dominant user of the blockchain technology. Overall, business and IT services are going to account for around 71.1% of total blockchain spending for the year 2019.
In terms of region-specific data, IDC has made a list depicting the contribution from various regions in the blockchain spending. Asia Pacific region excluding Japan is ranked third in terms of overall spending (18.4%) on the blockchain with the US (37.6%) and Western Europe (23.7%) regions occupying first and second place on the list respectively.