Blockchain Spending Will Slow Down to $4.3 Billion in 2020

Blockchain spending will decline in 2020 as compared to the pre-COVID-19 forecast scenario, according to IDC. This decline is led by marked reductions in IT spend and bleak economic growth in recent months due to the pandemic.

Worldwide spending on blockchain solutions is forecast to reach nearly $4.3 billion in 2020, a tempered 57.7% growth from the $2.7 billion spent in 2019. While IDC forecasts a drop in blockchain spend in every industry in 2020 due to COVID-19, the scope of these reductions will vary across industries. IDC expects blockchain spending to grow at a tempered pace over the 2018-2023 period with a five-year compound annual growth rate of 55.3% for Asia/Pacific and 57.1% for Worldwide, with worldwide spend reaching $14.4 billion by 2023.

Asia/Pacific contributes around 19.3% of the overall worldwide spend on blockchain in 2020, and is behind US and Western Europe in terms of total market size. The market is primarily driven by three use cases that are linked to the BFSI sector: Cross-Border Payments & Settlements, Trade Finance & Post Trade/Transaction Settlements, and Regulatory Compliance. The drive across various Asia/Pacific economies to improve payment methods, and assist in maintaining records for regulatory compliance and checks, continues to be the most dominant mind-set that is expected to benefit blockchain investments in the region.

"Despite initial resistance, companies that adopted the technology early on have experienced significant benefits during the early months of the COVID-19 pandemic; better control of their supply chain, better traceability of goods, and the ability to maintain an auditable track record of product movement. Due to this reason, Blockchain technology has turned out to be a saving grace for some enterprises,“ says Ritika Srivastava, Associate Market Analyst at IDC Asia/Pacific.

“The technology has helped enterprises across many industries to overcome the challenges from managing supply chains, medical data verifications, and tracking insurance claims in the region where the adoption is still in its nascent stage. Although there is reluctance to utilize the technology, many of the professional services firms and manufacturing firms will start pushing the implementation of Blockchain technology in the post COVID marketplace," add Srivastava.