For the search for School of Management of the Polytechnic of Milan the Italian blockchain market is worth 38 million euros and blockchain projects are also growing in Italy. The research of the Blockchain and Web3 Observatory was presented on January 19th during the conference “Web3: Why, What and When?”.
Cryptocurrencies on the rise
2023 was a strong year transformation for the web3 world, with the development of the regulatory framework and encouraging market and adoption numbers. After a period of relative stability, the cryptocurrency market has recorded a recovery (+110% compared to 2022), thanks also to the development of spot ETFs on Bitcoin. Around 3 million users worldwide use 15,000 decentralized applications (DApps) every day, +75% in the last year. And the decentralized finance (DeFi) ecosystem has delivered investments stable around 45 billion dollars. Relevant, even if far from the 160 billion of April 2022, before the collapse of Earth-Moon and the subsequent “cryptowinter”.
Over 1300 projects registered worldwide
In this context, companies and PAs from all over the world have continued the development of blockchain-based projects. There are 297 new cases in 2023, +19% compared to 2022, which brings the projects registered from 2016 to today to over 1300. 31% of the top global companies in the Fortune Global 500 have demand implemented at least one blockchain-based project in recent years: 153 demand companies that in total have developed 336 proof of concept, pilot and operational projects.
Blockchain projects
Blockchain for business projects in particular are growing (+58%), equal to 36% of the total, with 106 new cases including token solutions and smart contracts to optimize business processes. In line with 2022, the Decentralized web projects, in which the blockchain serves to develop services close to the Web3 paradigm, with 96 new cases equal to 32%. The new projects based on the exchange of value, the so-called Internet of Value (between cryptocurrencies, stablecoins and Central Bank Digital Currency), are also stable: in 2023 there will be 95 cases, 32% of the total.
How is the national market doing?
In Italy, 2023 sees substantial stability in blockchain projects, with investments amounting to 38 million euros (-10%). But the actors have moved on Attention from the immediate launch of small-scale projects, which in 2022 had been mainly related to the creation of NFTs, to larger prototypes and pilot projects. 39% of investments concern the financial and insurance sector, which remains predominant. The importance of public administration projects increases, to 14%, and agrifood, 10%, followed by fashion (7%). Italians’ interest in cryptocurrencies and tokens is stable: 3.6 million declare they currently own them.
Blockchain projects
Valeria Portale, Director of the Blockchain & Web3 Observatory
2023 was a year characterized by a poor media attention on the world of blockchain, but the sector has by no means remained stagnant. Indeed, starting from the cumbersome legacy of instability and scandals, such as those of Terra-Luna and FTX, we have witnessed a phase of purification and maturation of the sector.Questionable speculative practices have been reduced and more evolution has been promoted aware of technology, greater attention was given to ethical aspects and sustainable development. At the same time, the idea of web3 continued to gain ground, a new model characterized by equity and inclusiveness, based on key concepts such as transparency, decentralization and active user involvement. A model that could represent a profound economic and social change.
Transparent and more inclusive applications
Francesco Bruschi, Director of the Blockchain & Web3 Observatory
In the year just ended, significant technological, regulatory and application progress was made. Among the applications, the one that has had particular impetus is tokenization, i.e. the representation of assets via blockchain systems. Prominent companies have integrated the stablecoin, tokenized fiat money, enabling new applications and transfer modes. The push for tokenization has increasingly affected so-called ‘Real World Assets’, traditional financial assets and even ownership of physical goods. This trend is driven by the prospect of better transferability and programmability, which makes them usable in transparent and more inclusive applications in the web3 context.
Off we go the project for the Digital Euro
Internet of Value applications involve using cryptocurrencies, stablecoins, and CBDCs to exchange value. In 2023, 95 new projects were developed worldwide, 32% of the total, in continuity with what was recorded in 2022. The project for the Digital Euro, after two years of study, officially passed to the phase on 1 November of preparation.
Blockchain projects are also growing in Italy
However the development of digital forms of central bank money (CBDC) is not one peculiarities European only. As many as 94 central banks (60% of the total) are actively examining or experimenting with CBDCs. 46% of initiatives are currently in the testing phase, an increase of +8% compared to 2022.
The development of ad hoc regulations
Giacomo Vella, Director of the Blockchain & Web3 Observatory
In parallel with the growth of projects, 2023 saw the continuation and first effects of the process of creating a more defined and favorable regulatory framework for institutional actors. In Europe there are already over 1,300 regulated and supervised ‘virtual currency operators’, of which 131 are in Italy.Furthermore, driven by the inclusion of these instruments in the MiCAr, some European players are developing stablecoins anchored to the euro capable of offering full programmability and interoperability with web3 applications. In the near future it will be crucial to understand how cryptocurrencies, stablecoins and CBDCs will develop over time, whether in mutual competition or following integration logics within the web3.
Blockchain for business
The area characterized by projects that aim to optimize business processes through tools such as tokens and smart contracts is currently the most widespread. In 2023 there will be 106, 36% of the total, +58% compared to 2022. An increase achieved despite the large ecosystem projects of the past continuing to encounter difficulties. Already in 2022, several major initiatives such as TradeLens and B3i had been discontinued. And even in 2023, some projects faced new challenges linked to maintaining relationships between the actors involved or to economic unsustainability.
According to the Polytechnic, blockchain projects are growing
The growth is mainly attributable to the numerous companies that have developed tokenization projects to innovate business processes. What stands out is the financial sector, where more and more prominent international and Italian players, such as Mediobanca or Crédit Agricole Italia, have issued bonds, NPLs or shares of tokenized funds. A decision that aims to improve theefficiency processes, reduce counterparty risks and access greater liquidity.
Cryptocurrencies in Italy: what they like…
Research carried out in collaboration with BVA Doxa shows that there are over 3.6 million Italians who declare they currently own cryptocurrencies or tokens. A third (32%) purchased them through a cryptocurrency exchange, 17% with a direct purchase wallet service. 38% of Italians prefer instead expose yourself financially to these instruments only indirectly through traditional trading services and banking apps. Among those who own crypto-assets, 37% store their assets using exchange services, with Coinbase, Crypto.com and Binance remaining the main ones (in 55% of cases).
…and what you like least
In line with 2022, however, 36% of users use non-custodial software wallets and 8% hardware wallets. Users who hold cryptocurrencies or tokens on generic financial trading services or on banking apps are increasing (38%, compared to 23% in 2022), probably also due to the increase in supply. However, the penetration of NFTs, play-to-earn games and DeFi applications is lower, adopted by 8%, 8% and 5% of respondents respectively.