A new report released by industry trade show FinTech Connect has revealed a lack of ‘clear business use case(s)’ is affecting the growth of distributed ledger technology (DLT).
Titled ‘The Blockchain in Financial Services Guide 2019’, the report shows more than half (55%) of those surveyed are expected to invest less than £10million, with a staggering 92% of fintechs and financial services surveyed investing in the new tech.
The lack of backing stems from the fact that 63% of respondents cited the lack of a ‘clear business use case’ as a key reason for not investing more time and resources into blockchain technology.
Commenting on the findings, Steve Clarke, founder & managing director, FinTech Connect said: “Over the last few years, there has an incredible hype train dictating the pace of blockchain technology.
“Yet from this report we can see there is still a big question mark over what impact it is going to have.”
Perhaps most interestingly, 80% of respondents believe a compromise between private and public blockchain technologies will soon be needed.
This follows the growth of asset-backed cryptocurrencies, such as Facebook’s Libra initiative, which more than a third of respondents believe will impact other digital assets like Bitcoin.
Respondents present a level of doubt on how Libra will impact blockchain moving forward however 55% believe it has helped place more of a spotlight on the technology.
Companies that work with DLT and their lack of urgency when dealing with due diligence checks was referenced by 73% of respondents as an obstacle of widespread blockchain adoption.
“The market is experiencing a crisis of confidence which has been made worse by the emergence of Libra and other stable coins which have made a complex market impossible to navigate,” continued Clarke.
“This uncertainty is curbing progress – investment is rolling in steadily but nobody is prepared to take the plunge.
“Until there is greater cross-collaboration between established players and new entrants, and proven use cases emerge as a result, the market will remain cautious and the industry will struggle to fulfil its potential.”