Global investment in blockchain technology will double this year compared to 2017, reaching $1.5 billion, according to a new report from International Data Corp. Investment will increase over the next five years at an annual rate of 73.2%, Framingham, Mass.-based IDC forecasts, reaching $11.7 billion in 2022.
“Enthusiasm for blockchain continues to be universally shared across regions as businesses and organizations alike continue to explore the technology’s potential business application,” Stacey Soohoo, research manager with IDC’s Customer Insights & Analysis unit, said in a statement. “Regulatory concerns and industry standards continue to hinder widespread adoption as governments around the globe work with enterprises to formulate policies and governance. As such, cross-business collaboration and blockchain interoperability are emerging as key aspects in the growth of the distributed ledger technology.”
Among nine regions, IDC says the United States will see the largest blockchain investments and account for more than 36% of the total. Next will be Western Europe followed by Asia-Pacific, excluding Japan and China. By country, Japan and Canada will lead with respective compounded annual growth rates of 109% and 87% between now and 2022, IDC predicts.
The global financial sector will lead other industries in blockchain investments with a forecasted $552 million this year. IDC predicts blockchain spending in banking alone will have a compounded annual growth rate of nearly 75% over the next few years.
Everyone from fintech startups to long-established firms seems to be doing something with blockchain. American Express Co. chairman and chief executive Stephen Squeri, for example, mentioned during Wednesday’s second-quarter earnings call that AmEx is testing blockchain technology with Boxed, an online warehouse club. When buying certain products from Boxed during the pilot, AmEx cardholders can earn five times the Membership Rewards points they normally would, according to CoinDesk. The test will employ technology from the Hyperledger Project, a cross-industry effort to promote open-source distributed-ledger systems that AmEx joined in early 2017.
IDC said the distribution and services sector, which includes retailers and professional services, will invest $379 million in blockchain technology in 2018, while the manufacturing and resources sector will invest $334 million. Distribution and services will draw the most U.S. blockchain investment, while the financial-services sector will attract the most investment this year in Western Europe, the Middle East and Africa, China, and Asia-Pacific excluding China and Japan, IDC says.
Among use cases for blockchain technology, cross-border payments and settlements will lead in 2018 with $193 million in investments, IDC predicts.