A new report published on Aug. 8 by United States-based market research firm International Data Corporation (IDC) forecast that overall spending on the technology will reach $15.9 billion in 2023, at a five-year compound annual growth rate (CAGR) of 60.2% between 2018-2023.
Worldwide spending on blockchain solutions is expected to hit almost $16 billion in 2023.
IDC’s Worldwide Semiannual Blockchain Spending Guide provides an analysis of spending data for the blockchain sector from a regional, vertical industry, use case, buyer and technology perspective.
Blockchain spending in 2019 to rise 80%
The latest report expects that in 2019, blockchain spending will see an 80% increase over 2018. Globally, the banking industry is expected to command the lion’s share of investment – at 30% throughout the forecast period.
20% of spending is set to come from discrete manufacturing and process manufacturing, with the latter also predicted to have the fastest spending growth of any industry – at 69.8% CAGR.
When it comes to blockchain technology development specifically, IT and business services combined are expected to account for 70% of global spending, with blockchain platform software identified as the largest area of investment outside of the services industry.
In terms of geographic breakdown, the U.S. will spend almost $1.1 billion on blockchain in 2019, with the second-largest market being Western Europe (at $661 million), followed by China ($304 million).
Blockchain spending growth is expected to be, in the IDC’s words, phenomenal, across all nine regions analyzed; Canada is set to have the highest CAGR, at 73.3%.
Interpreting the hard data
IDC Worldwide Blockchain Strategies Research Director James Wester has remarked that even though some uncertainty continues to surround the governance and regulation of blockchain systems, enterprise adoption has reached a tipping-point across a range of applications:
“The adoption of blockchain for financial services, identity, trade, and other markets is encouraging. Companies are recognizing value from initial pilot programs and moving those projects into production.”
His colleague Stacey Soohoo – from IDC’s Customer Insights & Analysis unit – underscored that it is no longer a matter of whether blockchain will be a lasting feature of the technology landscape, but, rather, how far its scope will extend.
As reported, the IDC predicted this spring that the U.S. federal government would raise blockchain spending to $123.5 million by 2022 – a 1,000%+ increase over a five-year period.
German Company Secures €750 Million ‘Eco-Friendly’ Loan Via Blockchain
German-based Dürr, one of the world’s leading mechanical and plant engineering firms, has secured a sustainability loan of 750 million euros, the interest on which is linked to its eco-friendly performance.
The credit agreement, reported on Aug. 8 by German-speaking Finance Magazine, was self-initiated by Dürr, utilizing a blockchain-based syndicated loan platform. The consortium process was also digitized and backed by blockchain.
The ins and outs of sustainable finance
Sustainable or green finance is on the rise and in the current economic climate, has benefits for both investors and lenders. Dürr’s latest agreement comes just two weeks after it issued a 200 million euro sustainability “schuldschein”, a popular German financing tool.
Both agreements depend on the company’s sustainability rating, as scored by the Ecovadis agency. This measures ecological factors like water consumption, along with working conditions, and more, and influences the rate of return on the loan.
Blockchain lending and Identification
The credit agreement was initiated through a blockchain-based syndicated loan platform, and the syndicate includes 13 banks from the U.S, Europe and Asia.
The consortium process was also digitized using software from Targens. Transaction participants create digital identities, which can then be used to authorize electronic signing of agreements and documentation.
“The digital identity check increases security, and the process is faster,” explained Dürr chief financial officer, Carlo Crosetto.
Blockchain platforms are increasingly being used for sustainable finance. As Cointelegraph reported, Spanish bank, BBVA issued a $40 million structured green bond back in February