Fintech solutions, retail focused platforms, and information communication technology or ICT software programs are expected to lead the blockchain or distributed ledger tech (DLT) revolution, according to a new report.
The findings of CIVITTA’s report reveal that finance, retail, and ICT solutions are the “most promising economic sectors” for applying and developing blockchain or DLT based platforms. The report has been prepared after relevant research was conducted by the BlockStart initiative, a pan-European DLT focused partnership program.
The research report has been drafted with assistance from European management consulting firm CIVITTA. It has been compiled after conducting expert interviews that examined several key economic sectors, which were “ranked in terms of their maturity, impact, feasibility, and level of the regulatory barriers for the implementation of the DLT solutions by SMEs.”
The report’s summary states:
“SMEs in Fintech scored highest in terms of readiness for the blockchain application. Many financial services are data-heavy and fault-prone, thus requiring intermediaries for mediation and ensuring trust. This drives the transaction costs up. Applying DLT allows reducing costs through operational simplification, regulatory efficiency improvement, settlement time reduction, etc.”
“Despite strict regulation, Fintech already holds the largest share in the blockchain market due to the extremely high potential effect of the DLT-based solutions’ implementation. In 2019, the global blockchain finance market size exceeded EUR 2 billion and is expected to reach EUR 19.5 billion by the end of 2025. For example, a peer-to-peer payments, investing and trading company Circle focusing on blockchain is valued at $3 billion.”
Vytautas Černiauskas, expert at CIVITTA. notes that the blockchain or DLT solutions began in the payments sector. It’s now being integrated into larger banking and insurance services, Černiauskas confirmed. He believes that the main benefits of DLT come when it’s used in finance applications to ensure security and speed when exchanging data and money.
Černiauskas explains that blockchain-powered solutions allow users to take advantage of “transparent infrastructure along with relatively low operational costs.”
He adds that blockchain applications in the retail sector are expected to be valued at around EUR 2 billion by 2023, “driven by a growing awareness that DLT solutions can improve the tracking of product authenticity, ensure reliable delivery throughout the supply chain and accountability of suppliers.”
The report further notes that spending on new ICT solutions is expected to grow by 14% in the coming years and applying blockchain/DLT may be among “the most transformative solutions, changing the notion of trust and bringing greater transparency.”