Blockchain solutions in the manufacturing industry are picking up as well. Source: Shutterstock.

The fate of blockchains in the APAC

WHEN you think of blockchains, you think they’re only making headway in the fintech and financial services space.

But that’s not true. Many companies in other sectors are also exploring how to make the most of blockchains in their business.

The fact that the technology provides transparency and makes tampering with records significantly harder than conventional recordkeeping makes it of interest to manufacturers, retailers, and supply chain operators too.

According to a recent forecast by IDC, spending on blockchain solutions is set to reach US$2.1 billion in 2022. In fact, the company’s analysts expect blockchain spending to grow rapidly over the forecast period 2017-22, with a five-year compound annual growth rate (CAGR) of 72.6 percent.

This year alone, spending is expected to reach US$272.7 million, which is almost a 100 percent increase against last years US$138.1 million figure.

The APAC will contribute around 17.8 percent of the overall worldwide spending on blockchain this year and is ranked third in terms of spending, topped by the US and Western Europe.

According to IDC’s findings, cross-border payments & settlements and, trade finance & post trade/transaction settlements and regulatory compliance are the top three use cases driving the spend in the region.

From their study, it seems as though the APAC is all set to adopt blockchain technology to improvise the payment methods and assist in maintaining records for regulatory compliance and checks.

IDC’s Senior Market Analyst Swati Chaturvedi believes that the region is still in the nascent stages of adopting blockchain as it has received skepticism earlier because of its security issues.

However, this digital ledger technology has grown beyond borders and governments/central banks and financial institutions in countries such as India, China, Singapore, and South Korea are testing pilot projects to reap maximum benefits.

According to IDC, the top three industries that contribute about 66.5 percent of the overall blockchain spend this year are banking, discrete manufacturing, and insurance.

However, the fastest growing industries in terms of blockchain adoption are: process manufacturing (81.3 percent CAGR), followed by retail (78.4 percent CAGR), and discrete manufacturing (72.9 percent CAGR) over the forecast period (2017-22).

From a technology aspect, services are the largest in terms of catering blockchain spending, accounting for around 57.7 percent this year and the trend is likely to continue over the forecast period, says IDC.

However, software is estimated to grow at a faster pace registering five-year CAGR of 81.6 percent, majorly driven by blockchain platform, along with security software.