What was not forecasted is that blockchain technology exploded in popularity this year. Businesses from a multitude of industries showed a growing interest to adopt this technology for enhancing their business processes. The COVID-19 pandemic accelerated the digital transformation drive in many areas, especially via the use of blockchain or distributed ledger technology. The global blockchain technology market size was valued at USD 3.67 billion in 2020. It is expected to expand at a compound annual growth rate (CAGR) of 82.4% from 2021 to 2028. “Expectations for 2021 are positive” “It is estimated that next year, at least 25 percent of the Forbes Global 2000 will use blockchain as a foundation for digital trust at scale.” 

We will see a reorientation of the various blockchain projects. Experts predict that 90% of blockchain projects will require replacement within a year. That is because most are ignoring key features such as tokenization, smart contracts, and decentralised consensus. Next to that, the pandemic has caused more realistic and pragmatic approaches to blockchain initiatives specifically focused on the day-to-day business “to continue their growth path”. Blockchain projects with clear benefits are expected to do that next year at an even faster pace. There has also been an uptick in the number of companies interested in participating in networks that specifically help to address some of the supply chain issues that the pandemic has put forward.  

Digital transformation is no longer a choice for businesses – it is essential to survival. Due to the increased strain that the COVID-19 pandemic put on day-to-day business, there is a dire need at corporates to accelerate their digital transformation process to emerge stronger than before. Blockchain technology is very likely to make the most transformative and dramatic changes in the way businesses function, during the coming years. Many industries are therefore intensively looking at blockchain as a helpful tool to become all the more digital.

Another trend we will observe is that private blockchains will become the main contributor to the blockchain market growth and are assumed to retain the largest market size in 2021. Enterprise blockchain solutions are developed customized according to a corporate’s business needs. Private blockchain provide more opportunities to corporates in terms of utilizing the blockchain technology for business-to-business use cases. They deliver higher efficiency, privacy, reliability, and transparency, while security is provided to a private blockchain using private keys that are known only to authorize persons in the organization.

From  a regional perspective China is leading the global blockchain game and will continue this role in 2021. Blockchain is taking China to the level, which is well beyond the present reach of other global market players. China’s “new infrastructure” national initiative, its state-backed Blockchain Based Service Network, is aimed to make blockchain an integral part of the country’s digital infrastructure. China’s further ambition is to provide a global public infrastructure via this Network. Beyond that, while other countries or regions like Europe are thinking to launch their own Digital currency, China is almost ready to issue their Crypto yuan.

Amongst all the industries affected by the COVID-19 pandemic, the financial sector is one area that has been hit particularly hard. Falling profits and tightening margins have forced banks to adapt and increasingly meet their customers need in a growing digital world. The adoption of fintech and blockchain technology, enables them to streamline their operations and modernize their operations. This may lead to a firm growth in contactless transactions and redesigned financial services. The banking and financial sector is expected to show exponential growth in blockchain adoption in the coming years. As a result this sector is going to hold the largest market size in the global blockchain market during the coming years.

Next to a firm acceleration that is expected in the acceptance of tokenisation i.e. the digital storage of assets on blockchain, another interesting upcoming trend in 2021 and further on will be DEFI or decentralised financial services. If we look at DEFI it shows how blockchain could be used for financial use cases which up till now have been “the missing point” for enterprise blockchain offerings. DEFI illustrates successful process of smart contracts for financial services. This alternative form of financing perfectly fits into the fintechisation of the economy.

This year we already have seen a firm rose of DEFI services. The total value of fulltime decentralised financial services (based on cryptocurrencies) witnessed an impressive growth and even surpassed USD 10 billion. It is seen to be further speeding up in 2021 and beyond.