Blockchain spending in Asia Pacific, excluding Japan, (APEJ)
is expected to reach nearly US$523 million in 2019, an increase of 83.9% from
the US$284.8 million spent in 2018, according to
the latest findings from the International Data Corporation (IDC)’s Worldwide
Semiannual Blockchain Spending Guide.
IDC, a provider of market intelligence and advisory services
for the information technology, telecommunications and consumer technology
markets, forecasts that blockchain spending in the region will grow at a strong
pace between 2018 and 2022 with a five-year compound annual growth rate (CAGR)
of 77.5%. The firm estimates a total spending of US$2.4 billion by 2022.
APEJ is set to contribute around 18.4% of the overall
worldwide spending on blockchain this year, ranking third after Western Europe
at 23.7% and the US, the biggest spender, at 37%. In APEJ, China is expected to
contribute the most, representing 70% of the region’s overall spend in 2022.
According to Ashutosh Bisht, senior research manager for
customer insights and analysis at IDC, blockchain implementations are moving
quickly beyond the pilot and proof of concept phase in APEJ. “We have reached
an inflection point,” Bisht said. “Networked integrity, distributed power,
value as incentive, security, privacy, rights reserved and inclusion are the seven
basic design principle of the blockchain economy, and are providing the
confidence for industry leaders to accelerate their adoptions of this maturing
technology.”
Findings
from a recent report by Global Market Insights go even further, suggesting that
the Asia Pacific region will likely user in a new era and lead in blockchain adoption.
The region’s blockchain market is estimated to grow by an estimated 87% over
the next six years.
According to Amyn Gillani, CEO of Talos Digital, a software
development company, one of the primary reasons APAC looks poised to blaze
trails in blockchain is its consumer market which is not only huge with a
middle class expected to reach 3.5 billion by 2030 but which is also especially
eager to embrace new technologies.
Additionally, government initiatives and policies in
countries including Thailand, Singapore, South Korea, Hong Kong and Japan are
helping fuel demand for blockchain technology in the region, he added. In
India, a recent study found that cryptocurrency and blockchain-related job
postings increased
by an astonishing 290% in 2017 and is still growing.
The banking and financial sector to lead blockchain adoption
According to IDC, the financial and banking industry will be
the biggest spender in 2019 and throughout the forecast period. Over the
2018-2022 forecast, IDC estimates that the financial sector will account for
about half of the world’s spending on blockchain. The banking, securities and
investment services, and insurance industries are expected to invest a combined
US$294.8 million in blockchain solutions in 2019.
IDC anticipates trade finance and post trade and transaction
settlements, as well as cross border payments and settlements, as the two
blockchain use cases that will receive the most investment in 2019, at US$82.1
million and US$79 million respectively.
Meanwhile, the manufacturing and resources sector, and the
distribution and services sector are set to witness blockchain spending of US$95
million and US$90.6 million respectively in 2019.
Over the 2018-2022 forecast, the fastest growth in blockchain
spending is expected to be seen in the infrastructure sector with a five-year
CAGR of 99.6%, followed closely by the distribution and services sector with a
CAGR of 83%.
“After much experimentation, [blockchain] is beginning to
emerge in a range of production environments driven by the thought leadership
of early adopters and an ever-growing industry of blockchain businesses helping
their customers realize the value of this technology,” said Simon Piff, vice
president for security and blockchain research at IDC Asia Pacific.
“As we see the emergence of the concept of digital trust, blockchain is a key ingredient in delivering this trust, at scale, across many markets, allowing a new pace of business interaction that had previously been restricted by process and approval challenges.”