Why Blockchain Is Booming in Asia Pacific
Market observers predict the Asia Pacific blockchain market to significantly grow in size over the next five years. Key growth drivers are the BFSI and supply chain sector, supportive governments and enthusiastic entrepreneurs.
A Global Markets Insights (GMI) report predicts the total size of the Asia-Pacific blockchain market could reach $16bn by 2024. That represents an 87% CAGR during the forecast period.
Another report by Research and Markets forecasts a 54% CAGR until the year 2023, and a total market volume of $4.59bn in 2023.
The forecasts differ, but both reports expect the APAC blockchain market to grow significantly over the next five years. What’s more interesting than the numbers, are the drivers behind the growth.
BFSI and supply chain applications are in demand
The GMI report categorizes the APAC blockchain market into infrastructure providers, application providers and operators.
According to the report, infrastructure providers currently dominate the market place and generate 65% of the total APAC blockchain industry revenue. However, most of the future growth will be achieved by application providers, as the market is driven by the growing demand for blockchain-based payment and documentation solutions.
Most applications will be developed in the banking, financial services and insurance (BFSI) sector and in supply chain management. That’s no surprise. The region is home to international finance hubs like Singapore and Hong Kong and plays a key role in many global supply chains.
In the BFSI sector, blockchain technology can support a wide variety of applications, ranging from cross-border payments and wallets to digital identification systems.
Supply chain management solutions can leverage blockchain technology to decrease bureaucracy and enhance transparency. Most blockchain applications in this sector aim at maintaining transaction records, verifying certificates and linking bar codes with digital codes.
The government sector will be another major growth driver. Governments throughout the region are looking at blockchain technology to streamline documentation processes, reduce bureaucracy and increase government efficiency.
Progressive regulatory environment
Government regulations in APAC are generally blockchain-friendly.
The Singapore government has launched a wide variety of blockchain initiatives and is is actively supporting privately funded projects.
Japan and South Korea have already provided the blockchain industry with legal and governmental regulations, and their central banks are in the process of licensing cryptocurrency exchanges.
China has had a somewhat ambiguous relationship with blockchain in the past. The government has banned cryptocurrencies, but is aggressively driving the adoption of blockchain technology in other areas. The phrase “Blockchain not Bitcoin” has become the country’s defining strategy.
The blockchain-friendly attitude of APAC governments has encouraged both, multinational players and start-ups to go ahead with their initiatives. Nowadays, the landscape is highly competitive, with key players like Samsung, IBM, Microsoft, all being active in the region.
Outlook: APAC will move fast
Asian investors and businesses are generally more willing to take risks than their European or American counterparts. Instead of hesitating and waiting for governments to create legal certainty, startups just go ahead and take massive action.
Enthusiastic entrepreneurs who are willing to take risks is what drives the development of new technologies and new industries. Companies in the region are hungry for growth, optimistic about the technology and practical in their approach. The race for technological leadership is on, and Asia Pacific is picking up the pace.
