Blockchain Investments in Europe Remain Stable
European spending on blockchain solutions is forecast to be $2 billion in 2021, with a robust increase over 2020, when the market experienced slower growth due to the pause in investments brought about by COVID-19, according to IDC. Blockchain spending in Europe will nearly triple from 2020 to 2024, with a five-year compound annual growth rate (CAGR) of 49.4% for 2019–2024.
"European spending growth in blockchain is robust, considering the issues faced by the global economy in 2020 and the still-adverse situation in 2021, despite the beginnings of a mild recovery. Blockchain technology approaches are changing across companies, which are rebuilding their processes to adapt to faster and unavoidable digital transformation," said Carla La Croce, senior research analyst, European Blockchain Strategies, European Customer Insights and Analysis. "What is happening is that blockchain has started to be seen as an essential component of organizations' digital backbone."
"The pandemic has made many European companies slash their digital budgets and be more focused on short-term ROI," said Radoslav Dragov, senior research analyst, European Blockchain Practice Lead. "Today's successful tech providers typically offer solutions where blockchain is one essential part within a wider technological stack. A successful approach is focused on outcomes and synergy between technologies, not solely on blockchain."
Around a third of European blockchain spending will come from the banking industry, led by use cases such as cross-border payments and settlements, transaction agreements, and trade finance and post-trade/transaction settlements. Banking has traditionally been a leader in blockchain spending, but it has been further boosted by the recent wave of transaction settlement projects, the mainstream adoption of cryptocurrencies, upcoming regulations at the EU level for cryptoassets, and the growing popularity of and experimentation with Central Bank Digital Currency (CBDC).
Banking is followed by process manufacturing and discrete manufacturing as the largest industries for blockchain spending, together accounting for nearly a quarter and growing above the European average (with a 2019–2024 CAGR of 50.4% for process manufacturing and 50.0% for discrete manufacturing). The top use cases in these industries are lot lineage/provenance and asset/goods management, both inextricably linked to supply chain management. This confirms the crucial role played by the supply chain sector in driving blockchain spending, not only in Europe but globally.
The five-year CAGR in Europe is driven by healthcare, the fastest-growing industry in Europe, followed by banking, process, and discrete manufacturing, but also wholesale, utilities, and central government. Healthcare has been pushed forward by new projects and solutions in electronic informed consent for clinical trials, clinical trial recruitment, and IoT medical device trials, and by blockchain’s effectiveness in anti-counterfeiting measures. Healthcare has been pushed forward by new projects and solutions in electronic informed consent (econsent) for clinical trials, clinical trial recruitment, and IoT medical device trials, and by blockchain's effectiveness in anti-counterfeiting measures.