Blockchain, or digital ledger technology (DLT), has moved past the proof-of-concept stage but large scale commercial releases of the technology are likely to be delayed until after 2020, says a report by UK-based Global Data.

The report indicates that while some early blockchain projects are expected to go live this year, the complexities associated with adoption, issues of scale and regulatory hurdles mean most planned projects will be delayed.

Financial companies such as UK-based HSBC; US-based Goldman Sachs, Citi, JP Morgan and Santander, and China-based Credit China FinTech and Ping An, along with global technology suppliers IBM, SAP, and Microsoft are considered to be leading the adoption of blockchain technologies globally.

However, the Global Data report also says that despite some success, a number of projects run by the likes of New York-based Depository Trust & Clearing Corporation (DTCC) and Paris-based BNP Paribas were quietly shelved over the course of 2017.

According to their report, the global market for blockchain technology which comprises apps, middleware, infrastructure and protocol provision, will continue to be significantly outstripped by investment activity over the next three years. “We expect to see strong growth in blockchain related revenues between 2018 and 2021, but some of the more bullish forecasts, promising revenues in excess of $2bn in 2021 are likely to prove over-optimistic,” the report says.

The UAE leads the Middle East region in terms of developing a blockchain strategy. It is expected that 50 per cent of all federal government transactions will be completed using blockchain technology by 2021.

IBM is also working with eight government agencies and private entities to explore the use of blockchain-based trade finance and logistics solutions in Dubai.

The pilot project could see the use of a blockchain solution for the import of goods into Dubai as well as their re-export.

Entities involved in the project include Dubai Customs, Dubai Trade, Dubai-based telecom service provider Du, Emirates NBD Bank, Banco Santander, logistics firm Aramex and a yet-to-be named airline company.

The solution will be based on Hyperledger Fabric, an open source cross-industry trade finance solution, and utilise IBM’s data centre infrastructure.