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The growing use of blockchain across Asia-Pacific excluding Japan (APeJ) is set to continue, with spending on the technology slated to grow by over 80% this year, according to industry estimates.
A report released by IDC predicts blockchain spending in APeJ will reach nearly $523.8m in 2019, an increase of 83.9% from the $284.8m spent in 2018.
By 2022, blockchain spending in the region – 70% of which will be in China – is expected to hit a five-year high of $2.4bn, representing a compound annual growth rate (CAGR) of 77.5%.
Most of the demand for blockchain technology will come from the financial sector, which will account for about half of total blockchain spending during the forecast period.
This year alone, banking, securities, investment services and insurance companies will invest $294.8m in blockchain technology, followed by manufacturing and resources ($95m), and retail and professional services ($90.6m).
Among industries, the infrastructure sector will see the fastest growth in blockchain adoption, with a five-year CAGR of 99.6%, followed by distribution and services with a CAGR of 83%.
“After much experimentation, this technology is beginning to emerge in a range of production environments, driven by the thought leadership of early adopters and an ever-growing industry of blockchain businesses helping their customers realise the value of this technology,” said Simon Piff, vice-president for security and blockchain research at IDC Asia-Pacific.
“As we see the emergence of the concept of digital trust, blockchain is a key ingredient in delivering this trust, at scale, across many markets, allowing a new pace of business interaction that had previously been restricted by process and approval challenges,” he said.
According to IDC, APeJ will account for 18.4% of overall worldwide spending on blockchain in 2019, behind the US (37.6%) and Western Europe (23.7%).
In 2018, Singapore-based fruit and vegetable distributor SunMoon Food rolled out a blockchain platform that lets consumers and suppliers track the provenance and condition of Chinese Fuji apples across its supply chain.
This has enabled SunMoon to capture real-time information on order fulfilments, such as the number of cartons packed, the batch origin of apples in various cartons, and fruit quality at the point of packing.
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In addition, SunMoon said its blockchain platform would open up trade financing opportunities. By providing potential financiers with assurance and verified information about its products, the company hopes to shorten the typical supply chain financing cycle from 60-90 days to about 24 hours.
Earlier in the year, Singapore-based Global eTrade Services launched an open trade blockchain network to boost cross-border trade between China and the rest of Asia.
Spending associated with cryptocurrencies, such as bitcoin, that use blockchain and distributed ledgers, is not included in IDC’s report.