Blockchain Government Market Expected to Reach $218.6 Billion by 2032—Allied Market Research

According to a new report published by Allied Market Research, titled, “Blockchain Government Market," The blockchain government market was valued at $2.5 billion in 2022, and is estimated to reach $218.6 billion by 2032, growing at a CAGR of 56.8% from 2023 to 2032.

Blockchain government market refers to the utilization of blockchain technology to transform and improve the efficiency, transparency, and security of government processes, services, and data management. Blockchain technology can be applied to various government sectors, including finance, supply chain management, healthcare, identity management, voting systems, and regulatory compliance. It has the potential to revolutionize government operations, improve service delivery, and enhance the trust and confidence of citizens in their interactions with government entities. In addition, by leveraging cryptographic algorithms and consensus mechanisms, blockchain enables the creation of a shared, immutable, and decentralized ledger that eliminates the need for intermediaries, reduces operational costs, and enhances data integrity. It provides a secure and transparent environment where information can be stored, verified, and accessed by authorized participants.

Furthermore, major market players have undertaken various strategies to increase the competition and offer enhanced services to their customers. For instance, in February 2022, Bitfury Group, the Bitcoin mining and crypto tech pioneer, launched a new 28MW digital asset mining data center in Sarnia, Ontario. The facility has commenced operations with expected capacity of 16MW. The project has expansion potential of up to 200MW. The Sarnia facility is equipped with Bitfury’s proprietary blockchain software and hardware solutions, including its specialized ASIC chips and other high-performance mining equipment. The new facility expands Bitfury’s hosting capacity and adds to the company’s existing active digital asset mining sites in North America, Scandinavia, and Eastern Europe/Central Asia. Therefore, such strategies help to support the blockchain government market growth. 

On the basis of application, the identity management segment attained the highest growth in 2022. This is attributed to the fact that the blockchain-based identity management systems streamline processes, reduce paperwork, and eliminate intermediaries. This increased efficiency leads to cost savings for governments by reducing administrative overheads, improving service delivery, and minimizing fraud & identity-related crimes. In addition, governments worldwide are embracing digital transformation initiatives, aiming to modernize public services and improve citizen experiences. 

However, the asset registry segment is expected to grow at the fastest rate during the forecast period due to the fact that asset registries are increasingly being integrated with Internet of Things (IoT) devices and sensor data to enhance asset tracking and management. IoT devices provide real-time data on asset location, condition, and usage. By integrating this data with blockchain-based asset registries, governments may improve supply chain management, maintenance scheduling, and regulatory compliance. 

Region wise, North America attained the highest growth in 2022, as governments are exploring the use of blockchain for secure and decentralized identity management systems. By leveraging blockchain, governments can provide citizens with greater control over their personal data while ensuring privacy, security, and interoperability across government services. In addition, blockchain technology has the potential to empower citizens by providing them with greater control over their data and enabling direct interaction with government services.

However, Asia-Pacific is anticipated to register the highest growth during the forecast period due to rise in use of digital payments, digital wallets, and smart contracts. In recent days, governments in countries such as India, Japan, and China have undertaken the deployment of blockchain technology. Governments of these countries are supporting the use of blockchain due to the massive benefits it provides to a variety of industries, including enhanced transparency and efficiency. These are the major blockchain government market trends in this region.

The pandemic highlighted the need for digital solutions and accelerated the digital transformation efforts of governments worldwide. Blockchain technology, with its potential to enhance transparency and efficiency, has gained increased attention as a viable solution for various government processes. The pandemic necessitated efficient management of health data, including test results, vaccination records, and contact tracing information. Blockchain's ability to provide secure and decentralized data storage and sharing attracted interest for managing health-related information and ensuring data privacy. In addition, the pandemic had accelerated the exploration of blockchain-based voting solutions as an alternative to traditional methods.

Furthermore, many governments allocated funds specifically for technology solutions, including blockchain, to improve their operations and service delivery. Blockchain government providers had the opportunity to secure government contracts and projects, which not only contributed to their revenue but also supported their growth and sustainability. Moreover, the pandemic highlighted the importance of resilience and preparedness in government operations. Governments recognized the need to strengthen their systems, including data management, supply chains, and citizen services, to better respond to future crises. Blockchain government providers, with their focus on transparency, security, and decentralization, were able to contribute to the development of resilient systems, positioning themselves for long-term growth and relevance. Therefore, COVID-19 had a positive impact on the blockchain government market demand.

Key Findings of The Study

• By provider, the infrastructure providers segment led the blockchain government market size in terms of revenue in 2022.
• By application, the payments segment led the blockchain government market share in terms of revenue in 2022.
• By region, North America generated the highest revenue in 2022.

The key players profiled in the blockchain government market analysis are IBM, Microsoft, SAP SE, Oracle, Amazon Web Services, Inc., Infosys Ltd, Bitfury Group Limited., BLOCKO Inc., RecordsKeeper, and Auxesis Services & Technologies (P) Ltd. These players have adopted various strategies to increase their market penetration and strengthen their position in the blockchain government industry.