According to TechWireAsia, the Asia Pacific (APAC) region is one of the fastest growing regions when it comes to blockchain spending in 2018. In terms of blockchain spending, they are currently ranked third, after the U.S. and Western Europe.
The APAC region is an interesting one when it comes to economic growth. The UN reported in May 2018 that APAC has promising prospects ahead and is registering robust growth. According to the Economic and Social Survey of Asia and the Pacific (ESCAP), developing economies in the APAC region was looking to experience a growth rate of 5.8 percent in 2017, 0.4 percent higher than in 2016. In 2018 and 2019, the APAC economy is looking grow by 5,5 percent.
A looming concern for APAC is that “rapid technological advancements while promising immense opportunities are also posing considerable challenges in terms of job polarization and income and wealth inequalities,” said Shamshad Akhtar, the executive secretary of the ESCAP.
Blockchain Technology to Hit a $2.1 Billion Market Capitalization in 2022
While blockchain will have an immense impact in the APAC region, the global blockchain technology market is also expected to experience a very high compound annual growth rate (CAGR). According to a forecast by IDC, the blockchain technology industry will reach $2.1 billion in 2022. Blockchain spending is predicted to grow extremely quickly over the next five years from (2017-2022) with a five-year CAGR of 72.6 percent.
Spending in 2018 is estimated to hit $272.2 million, a 100 percent increase from 2017’s figure of $138.1 million. Reuters reported that blockchain technology has been predominantly used in the financial and banking industries. Blockchain in the fintech sector has a variety of applications including smart contracts, remittance management, digitization of physical assets, asset trading, identity management, and ownership management. It is currently used for its ability to provide greater transparency, faster transactions, reduce operational costs, and streamline business operations.
The Up Market Research report noted that a lot of different industries are currently in the process of raising capital to fund blockchain-related projects. The sheer number of funds flowing into the sector will increase its market growth. Blockchain technology is currently in very high demand is will gain significant recognition as a key technology across the globe.
APAC Looks to Contribute 17.8 Percent of Global Blockchain Spending
TechWireAsia reported that the APAC region will contribute approximately 17.8 percent of the global spending on blockchain technology in 2018. The top-three uses cases for blockchain spend in the APAC region include cross-border payments and settlements, trade finance and post-trade/transaction settlements, and regulatory compliance. Based on IDC’s report, it appears as though the APAC region is keen to adopt blockchain technology to improve existing payment methods and record-keeping to ensure regulatory compliance.
The APAC region is still in the early stages of blockchain adoption. Swati Chaturvedi, IDC’s senior market analyst, believes that the APAC region is slightly slower to adopt blockchain because of the skepticism the blockchain industry experienced due to its earlier security issues.
Blockchain has, however, grown beyond governments, central banks and financial institutions in major APAC countries like India, China, Singapore, and South Korea. Blockchain technology is now an avenue that many emerging startups are testing in these regions.
“Blockchain technologies are being adopted by a wide range of industries across the Asia Pacific region,” said Simon Piff, the Vice President, IDC Asia/Pacific (Singapore). “While many of the use cases are coming from the financial services industry: in markets as diverse as Australia, Thailand, and Singapore, we are also seeing strong acceptance across the entire supply chain from food provenance to logistics.”
Blockchain Technology is Growing Quickly in the Manufacturing and Retail Industries
According to the IDC, banking, discrete manufacturing and insurance are the top-three industries that contribute approximately 66.5 percent of the overall blockchain industry in the APAC region. However, process manufacturing, retail, and discrete manufacturing are the fastest growing industries when it comes to adopting the emerging technology.
Services are the largest industry when it comes to blockchain spending and are expected to account for approximately 57.7 percent in 2018. Software for blockchain technology will, however, grow at a faster rate. Blockchain software is expected to reach a CAGR of 81.6 percent. These statistics are predominantly driven by the creation of a blockchain platform software and improvements in security software.
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