Smart Contracts Market Expected to Reach $2.5 Billion by 2032—Allied Market Research

According to a new report published by Allied Market Research, titled, “Smart Contracts Market,  by Contract Type (Smart Legal Contract, Decentralized Autonomous Organizations (DAO), Application Logic Contracts (ALC), and Distributed application (DApp)), Platform (Ethereum, Bitcoin, Sidechains, NXT, and Others), by Enterprise Size (Large Enterprises and SMEs), and by End User (BFSI, Retail, Healthcare, Real Estate, Logistics, and Others): Global Opportunity Analysis and Industry Forecast, 2023-2032."  The smart contracts market was valued at $192.69 million in 2022, and is estimated to reach $2.5 billion by 2032, growing at a CAGR of 29.6% from 2023 to 2032.

A smart contract is a digital contract that is self-executed and operated on a blockchain platform. They are mainly formed to facilitate, verify, and enforce the performance of the contract in a secure and transparent manner. They typically are used to automate the execution of an agreement so that all participants can be immediately certain of the outcome, without any intermediary’s involvement or time loss. They can also automate a workflow, triggering the next action when conditions are met.

Furthermore, the increase in adoption of blockchain technology and increase in demand for smart contracts in educational institutions is boosting the growth of the global smart contracts market. In addition, increase in demand for automation and  digital transformation technology is positively impacts growth of the smart contracts market. However, lack of scalability and standardization and presence of legal and regulatory uncertainties is hampering the smart contracts market growth. On the contrary, increasing adoption of various applications in industries is expected to offer remunerative opportunities for expansion of the smart contracts market during the forecast period.

Depending on enterprise size, the large enterprise segment holds the largest smart contracts market share owing to, rising number of transactional benefits, automate processes, minimize risks, quick and prompt service. However, the SMEs segment is expected to grow at the highest rate during the forecast period, as it small & medium enterprises to reduce costs by automating many of their processes.

Region-wise, the smart contracts market size was dominated by North America in 2022 and is expected to retain its position during the forecast period, owing to an increase in major technological advancements and a high rate of new products. However, Asia-Pacific is expected to witness significant growth during the forecast period, owing to the rising deployment of smart contracts, predominantly in developing countries like China and India.

The smart contracts market witnessed stable growth during the COVID-19 pandemic, owing to the lockdowns and restrictions on the movement of people and goods, which disrupted the supply chain operations. At the same time, consumer demands got limited as individuals remained keen on eliminating non-essential expenses from their budgets.

Moreover, the global market is poised for a recovery and potential growth as digitalization continues to gain traction and the restrictions on the movement of people and goods are gradually relaxed. In addition, consumer demand subsequently reduced as individuals were keener on eliminating non-essential expenses from their respective budgets as the general economic status of most individuals was severely affected by this outbreak. These elements burdened the revenue trajectory of the global smart contracts market. However, as respective governing authorities lifted these enforced lockdowns, the global smart contracts market trends recovered accordingly.

The integration of advanced technologies such as AI and smart contract blockchain is helping the industries to improve various aspects of a company such as perception, reasoning, learning, and problem solving of the human mind for detecting and predicting risks, which, in turn, is driving the growth of the market. In addition, , which are expected to provide lucrative opportunity for the market. Moreover, various public and private entities are expected to come together to create ecosystems to share data for multiple use cases under a common regulatory and cybersecurity framework, which, in turn, is expected to provide lucrative opportunity for the growth of the global market. Several market players in the smart contracts market are focusing on venture capital investments to raise funding for enhancing the product portfolio and cementing the market position. 

These investments are expected to create new opportunities for the growth of the market over the forecast period. Furthermore, the key players in the smart contracts market include, IBM Corporation, Tata Consultancy Services, BlockCypher, Blockstream Corporation Inc., Monax Industries Limited, BitPay, Inc. These market players are pursuing various growth strategies, such as strategic partnerships, mergers & acquisitions, and new product development, as part of the efforts to further expand their global market presence. For instance, in February 2023, Blockchain for Energy (B4E) launched own network & platform. Using this platform, member companies build, test, and access smart contract solutions all in one place. This launch marks B4E’s monumental next step in advancing to Web3. Therefore, such strategic initiatives drive the market growth.

Key Findings of The Study

• By contract type, the decentralized autonomous organizations (DAO) segment accounted for the largest smart contracts market share in 2022.
• Region wise, North America generated highest revenue in 2022.
• Depending on end user, the BFSI segment generated the highest revenue in 2022.

The key players profiled in the smart contracts market analysis are ScienceSoft USA Corporation, innowise group, IBM Corporation, Tata Consultancy Services, BlockCypher, Blockstream Corporation Inc., Monax Industries Limited, BitPay, Inc., Chain, Inc., and Coinbase. These players have adopted various strategies to increase their market penetration and strengthen their position in the smart contracts industry.