LONDON – The rising use of cryptocurrency will drive the growth of the market. Cryptocurrency is a peer-to-peer digital payment system that doesn’t rely on banks to verify transactions. Cryptocurrencies run on a distributed public ledger called a blockchain, a record of all transactions updated and held by currency holders. Units of cryptocurrency are created through a process called mining, which involves using computer power to solve complicated mathematical problems that generate coins. Users can also buy the currencies from brokers, then store and spend them using cryptographic wallets. For example, according to Pew Research, a nonpartisan think tank company, in November 2021, the vast majority of U.S. adults have heard at least a little about the blockchain technology industry and cryptocurrencies like Bitcoin or Ether, and 16% say they personally have invested in, traded or otherwise used one, according to a new Pew Research Center survey. Men aged 18 to 29 are particularly likely to say they have used cryptocurrencies.
The global blockchain in banking and financial services market size is expected to grow from $1.17 billion in 2021 to $1.89 billion in 2022 at a compound annual growth rate (CAGR) of 61.9%. The blockchain in banking and financial services market is expected to reach $12.39 billion in 2026 at a CAGR of 60%.
Reinsurance Companies Are Rapidly Adopting Blockchain Technology
Blockchain technology is being increasingly adopted by reinsurance companies for faster, more efficient, and more accurate claim settlement and compliance checks such as sanctions. Blockchain technology allows for safe data management across different interfaces and stakeholders while maintaining data integrity. The system reduces operational expenses across the board, from identity management and underwriting to claims processing, fraud management, and reliable data availability. For instance, Ryskex, an insurtech business, uses its blockchain-based platform to make it easier for insurers to analyze and manage risks effectively.
In 2021, SAP SE Held The Largest Share In The Market
SAP SE was the largest company in blockchain in financial market with a 13.43% share of the market in 2021. SAP SE’s growth strategy focuses on expanding its product portfolio with new and advanced technology through new product launches. For instance, in May 2020, SAP SE announced the launch of its plan to add its blockchain technology to its supply chain traceability platform to aid its stakeholders.
Blockchain Scalability Poses A Limitation For The Market’s Growth
Blockchain scalability is a main restraint that negatively impacts the growth of the market. Scalability refers to how well a system can manage increasing amounts of data. Blockchain scalability is how well it can handle an increasing number of transactions. A major part of the issue comes from the fact that blockchain requires all participants to agree on the validity of transactions.
Source: The Business Research Company
