Smart Contracts Market Size
| Study Period | 2019 - 2029 |
| Market Size (2024) | USD 1.98 Billion |
| Market Size (2029) | USD 5.89 Billion |
| CAGR (2024 - 2029) | 24.36 % |
| Fastest Growing Market | North America |
| Largest Market | North America |
| Market Concentration | Low |
Major Players
*Disclaimer: Major Players sorted in no particular order |
Smart Contracts Market Analysis
The Smart Contracts Market size is estimated at USD 1.98 billion in 2024, and is expected to reach USD 5.89 billion by 2029, at a CAGR of 24.36% during the forecast period (2024-2029).
- Smart contracts, hosted on a blockchain, are computer programs with code that specifies conditions triggering outcomes. It is operating on a decentralized blockchain rather than a centralized server ensures multiple parties can achieve results accurately, timely, and without tampering. Smart contracts are a robust automation infrastructure immune to central control and single-point attacks. When utilized in multi-party digital agreements, they can diminish counterparty risk, boost efficiency, cut costs, and enhance process transparency.
- The surge in smart contract adoption is fueled by the broader embrace of blockchain technology, ongoing technological advancements, cost reductions, and a rising appetite for Decentralized Finance (DeFi). As businesses increasingly turn to blockchain for its security, efficiency, and transparency in data management and transactions, the significance of smart contracts grows. Moreover, with DeFi's rapid expansion, the escalating adoption of smart contracts seems inevitable.
- The popularity of non-fungible tokens (NFTs) has increased, leading to the widespread use of smart contracts in digital art, collectibles, and virtual real estate. This trend enhances ownership verification and provenance tracking. Worldcoin's 2023 update highlights that Ethereum, the leading blockchain for smart contracts, is limited to 30 transactions per second.
- Smart contracts are transforming various industries by automating processes and improving transparency, efficiency, and security. In real estate, smart contracts automate tasks such as escrow services, title transfers, and lease agreements, reducing the need for intermediaries like lawyers. The rising construction of commercial and residential buildings and increasing demand for homes and offices creates new market opportunities.
- Furthermore, smart contracts offer real-time tracking of goods. Recording every stage of the supply chain on the blockchain allows all parties to access identical information, thereby minimizing fraud and bolstering accountability. Various sectors, including logistics, agriculture, and energy management, are witnessing the integration of smart contracts with Internet of Things (IoT) devices, facilitating automated processes. The growing adoption of IoT devices is expected to propel market growth.
- Smart contracts rely heavily on precise coding and the security of their underlying blockchain. Even minor coding errors can result in dire outcomes, including unauthorized access, misappropriated funds, or unintended legal issues. The shortage of skilled professionals hampers market growth.
- Organizations might delay adopting new technologies like smart contracts due to economic uncertainty, choosing to wait until the market stabilizes. Inflation can raise the costs associated with developing and deploying smart contracts, such as labor and technology expenses. This may lead to slower project rollouts or increased fees for users.
Smart Contracts Market Trends
BFSI to Hold Significant Market Share
- Banking and financial institutions are expected to hold a significant share owing to the adoption of automated processes and increasing online payments. Smart contracts facilitate automated billing, enabling users to establish recurring payments for services such as utilities or subscriptions. These contracts execute payments according to predetermined schedules, guaranteeing punctual transactions.
- Smart contracts streamline Know Your Customer (KYC) and Anti-Money Laundering (AML) processes by verifying user identities and transaction histories. This alleviates the workload for financial institutions and guarantees adherence to regulations. To curb illegal activities, various countries' governments continue to emphasize strict adherence to KYC norms, particularly for virtual currencies and online financial platforms.
- In India, Know Your Customer (KYC) regulations are essential in financial services, aiming to prevent fraud, money laundering, and terrorism financing. The Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI) have implemented KYC norms that require banks and financial institutions to verify customers' identities and addresses before opening accounts or providing services. Additionally, the Indian government promotes digital KYC processes, particularly through Aadhaar, the national biometric ID system, enabling faster and more efficient customer verification. Such policies and rules are expected to propel market growth.
- Furthermore, blockchain technology's immutable nature ensures transparent and easily auditable transaction histories, simplifying regulatory reporting and cutting compliance costs which drives demand for smart contracts in BFSI sectors. Smart contracts enhance the claims process by automatically validating claims against set criteria (such as weather events in crop insurance) and initiating payments once conditions are satisfied. This not only curbs fraud but also accelerates payouts.
- Online banking is significantly boosting the demand for smart contracts, emphasizing the need for enhanced efficiency, security, and automation in financial transactions. According to Eurostat, in 2023, online banking witnessed notable growth across Europe, with Scandinavian nations at the forefront. Among the European countries analyzed, Norway topped the list with an impressive internet banking penetration rate of 96.85 percent. Following closely, Denmark showcased a robust 96.22 percent penetration rate, underscoring the nations' advanced digital infrastructure and tech-savvy demographics.
North America to Hold Significant Market Share
- In the United States, the surge in online banking adoption and heightened security demands in sectors like logistics and healthcare are propelling the embrace of smart contracts. The pandemic has notably accelerated the shift to online banking, resulting in a surge in user adoption. Digital banking innovations, from AI-driven budgeting tools to mobile payment platforms, are reshaping the banking arena. Furthermore, select digital banks harness AI not just for customer experience enhancement but also to boost productivity.
- According to the American Bankers Association, 48% of bank customers prefer mobile apps for account management, while 23% lean towards online banking via laptops or PCs. Other methods, albeit less popular, include branch visits (9%), ATMs (8%), and telephone inquiries (5%). As digital banking gains traction, consumers are demanding transactions that are seamless, swift, and secure. This evolving expectation has led financial institutions to actively pursue solutions that bolster both efficiency and security actively, further fueling their interest in smart contracts.
- Healthcare providers, governed by stringent regulations like HIPAA, must prioritize compliance with data protection laws. Smart contracts can automate these compliance checks and enhance security by managing consent for data sharing. As the healthcare sector focuses more on protecting sensitive patient information, smart contracts offer secure access controls and automated data-sharing agreements. This ensures that patient data is accessible only to authorized personnel.
- In 2023, Office for Civil Rights (OCR) received reports of 725 data breaches, resulting in the exposure or impermissible disclosure of over 133 million records. Between January 1, 2018, and September 30, 2023, OCR noted a 239% surge in hacking-related data breaches and a staggering 278% rise in ransomware attacks. Notably, hacking incidents accounted for 79.7% of all data breaches in 2023. The rising number of data breaches in the healthcare industry is projected to boost market growth.
Smart Contracts Industry Overview
The smart contracts market is highly fragmented, with global and local conglomerates and specialized players operating across various segments. While several large multinational companies dominate specific high-value segments, numerous regional and niche players contribute to the overall competition, making the market highly diverse. This fragmentation is driven by the demand for smart contracts market across a wide range of end-user verticals, allowing both large and small companies to coexist and thrive in the market.
Leading companies in the smart contracts market include Innowise Group, ScienceSoft USA Corporation, iTechArt, 4soft, Algorand, IBM Corporation, Tata Consultancy Services Limited, Chainlink, ELEKS, and Waves Technologies. These companies have established strong brand recognition and extensive global operations, enabling them to command significant market share. Their strengths lie in innovation, broad product portfolios, and strong distribution networks. These leaders often engage in strategic acquisitions and partnerships to maintain their competitive edge and expand their market reach.
Companies prioritize innovation to succeed in the smart contracts market, as demand from major industries such as healthcare, BFSI, logistics, retail, real estate, and others is accelerating. In recent years, significant technological advancements in blockchain technology have transformed the smart contracts market. Companies that invest in emerging markets and adapt their offerings to regional needs are likely to gain a competitive advantage in this fragmented market.
Smart Contracts Market Leaders
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IBM Corporation
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Chainlink
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ScienceSoft USA Corporation
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Coinbase
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Tata Consultancy Services Limited
*Disclaimer: Major Players sorted in no particular order
Smart Contracts Market News
- April 2024: The EY organization launched the EY OpsChain Contract Manager (OCM), a groundbreaking blockchain-enabled solution tailored for contract management. With EY OCM, enterprises can navigate intricate business agreements, ensuring confidentiality, enhancing time efficiency, and reducing costs, all while automatically adhering to the stipulated terms.
- March 2024: The Stellar Development Foundation (SDF), a nonprofit dedicated to advancing the Stellar network, officially launched Soroban, its smart contracts platform, on the Stellar mainnet. This milestone allows users to seamlessly build, deploy, and engage with decentralized applications (dapps) on the Stellar network.
Smart Contracts Market Report - Table of Contents
1. INTRODUCTION
1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET INSIGHTS
4.1 Market Overview
4.2 Industry Attractiveness - Porter's Five Forces Analysis
4.2.1 Threat of New Entrants
4.2.2 Bargaining Power of Buyers/Consumers
4.2.3 Bargaining Power of Suppliers
4.2.4 Threat of Substitute Products
4.2.5 Intensity of Competitive Rivalry
4.3 Impact of COVID-19 Aftereffects and Other Macroeconomic Factors on the Market
5. MARKET DYNAMICS
5.1 Market Drivers
5.1.1 Rising Demand for Secure and Efficient Solutions in BFSI Sector
5.1.2 Rapid Adoption of Blockchain Technology
5.2 Market Restraints
5.2.1 Lack of Skilled Human Resources
6. MARKET SEGMENTATION
6.1 By Type
6.1.1 Application Logic Contracts
6.1.2 Decentralized Autonomous Organizations
6.1.3 Smart legal contract
6.2 By Enterprise Size
6.2.1 Small and Medium Enterprises
6.2.2 Large Enterprises
6.3 By End-user Industry
6.3.1 Retail
6.3.2 BFSI
6.3.3 Healthcare
6.3.4 Logistics
6.3.5 Real Estate
6.3.6 Others
6.4 By Geography***
6.4.1 North America
6.4.2 Europe
6.4.3 Asia
6.4.4 Australia and New Zealand
6.4.5 Middle East and Africa
6.4.6 Latin America
7. COMPETITIVE LANDSCAPE
7.1 Company Profiles
7.1.1 ScienceSoft USA Corporation
7.1.2 Innowise Group
7.1.3 iTechArt
7.1.4 4soft
7.1.5 Algorand
7.1.6 IBM
7.1.7 Tata Consultancy Services Limited
7.1.8 Chainlink
7.1.9 ELEKS
7.1.10 Waves Technologies
7.1.11 BlockCypher
7.1.12 Blockstream Corporation Inc.
7.1.13 Monax Industries Limited
7.1.14 BitPay, Inc.
- *List Not Exhaustive
8. INVESTMENT ANALYSIS
9. FUTURE OUTLOOK OF THE MARKET
Smart Contracts Industry Segmentation
A smart contract is a digital agreement stored on a blockchain network, executing automatically upon meeting its terms and conditions (T&C), which are coded in blockchain-specific languages like Solidity.
The study tracks the revenue accrued through the sale of smart contracts solutions by various players worldwide. The study also tracks the key market parameters, underlying growth influencers, and major vendors operating in the industry, which supports the market estimations and growth rates over the forecast period. The study further analyses the overall impact of COVID-19 aftereffects and other macroeconomic factors on the market. The report’s scope encompasses market sizing and forecasts for the various market segments
The smart contracts market is segmented by type (application logic contracts, decentralized autonomous organizations, and smart legal contracts), enterprise size (small and medium enterprises and large enterprises), end-user (retail, BFSI, healthcare, logistics, real estate, and others), and geography (North America, Europe, Asia Pacific, Middle East & Africa, and Latin America). The market sizes and forecasts are provided regarding value (USD) for all the Above segments.
| By Type | |
| Application Logic Contracts | |
| Decentralized Autonomous Organizations | |
| Smart legal contract |
| By Enterprise Size | |
| Small and Medium Enterprises | |
| Large Enterprises |
| By End-user Industry | |
| Retail | |
| BFSI | |
| Healthcare | |
| Logistics | |
| Real Estate | |
| Others |
| By Geography*** | |
| North America | |
| Europe | |
| Asia | |
| Australia and New Zealand | |
| Middle East and Africa | |
| Latin America |
Smart Contracts Market Research Faqs
How big is the Smart Contracts Market?
The Smart Contracts Market size is expected to reach USD 1.98 billion in 2024 and grow at a CAGR of 24.36% to reach USD 5.89 billion by 2029.
What is the current Smart Contracts Market size?
In 2024, the Smart Contracts Market size is expected to reach USD 1.98 billion.
Who are the key players in Smart Contracts Market?
IBM Corporation, Chainlink, ScienceSoft USA Corporation, Coinbase and Tata Consultancy Services Limited are the major companies operating in the Smart Contracts Market.
Which is the fastest growing region in Smart Contracts Market?
North America is estimated to grow at the highest CAGR over the forecast period (2024-2029).
Which region has the biggest share in Smart Contracts Market?
In 2024, the North America accounts for the largest market share in Smart Contracts Market.
What years does this Smart Contracts Market cover, and what was the market size in 2023?
In 2023, the Smart Contracts Market size was estimated at USD 1.50 billion. The report covers the Smart Contracts Market historical market size for years: 2019, 2020, 2021, 2022 and 2023. The report also forecasts the Smart Contracts Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.
Smart Contracts Industry Report
Statistics for the 2024 Smart Contracts market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. Smart Contracts analysis includes a market forecast outlook for 2024 to 2029 and historical overview. Get a sample of this industry analysis as a free report PDF download.
