Germany Lags in Blockchain Adoption: 72% of Companies Not Interested in the Technology – Study

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Veronika Rinecker

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Veronika Rinecker

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Veronika Rinecker is based in Germany, studied international journalism and media management. She specializes in politics and regulation, energy, blockchain, and fintech. Since 2017, she has been...

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November 29, 2024 04:27 EST

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Despite blockchain‘s transformative potential, the technology remains largely overlooked by German businesses, according to a recent W3NOW study, an initiative of the Hanseatic Blockchain Institute and the German Federal Ministry for Economic Affairs and Climate Action.

The study, which combines two quantitative surveys – of 9,000 German companies and 204 experts – as well as qualitative interviews, finds that blockchain technology is simply “not an issue” for the majority of German companies.

AI and Cloud Computing Take Off, Blockchain Lags Behind

In both 2023 and 2024, more than 74% and 72% of companies, respectively, said that blockchain was not relevant to their business operations.

This disinterest is particularly striking when compared to the rapid adoption of artificial intelligence (AI), where the percentage of companies actively using AI doubled from 13% in 2023 to 27% in 2024.

While blockchain and AI show varying degrees of adoption, cloud computing has emerged as the most widely adopted technology among the three digital innovations examined in the study.

As of June 2023, over 46% of German companies were already utilizing cloud computing, significantly surpassing the adoption rates of blockchain (3%) and AI (13%).

Strong Blockchain Adoption in Finance and Identity

In the survey, 132 companies that already use blockchain technology were specifically asked about the areas in which they implement these technologies.

The financial services sector is leading the way in blockchain adoption in Germany, with 54% of surveyed companies already using the technology. This high adoption rate indicates that blockchain is mature and well-tested in this sector, likely driven by the availability of capital and investments.

Digital identity also shows strong growth potential, with 31% of companies having implemented various blockchain-based solutions and 23% in the planning stage. This suggests that blockchain’s ability to provide secure and decentralized identity management is becoming important.

While 28% of companies currently use blockchain for marketing purposes, only 10% of companies have plans to implement blockchain in their marketing strategies, suggesting a lack of widespread enthusiasm for the technology in this sector.

Bitcoin in Germany: Primarily an Investment Asset

While Bitcoin (BTC) remains the dominant cryptocurrency with the highest market capitalization, its use in the German economy is primarily focused on investments (57%) and customer payments (49%).

A third of respondents (32%) use the Lightning network for transactions, and Bitcoin mining remains a niche activity (5%).

The primary motivations for using Bitcoin in Germany are its perceived role in shaping the future of finance (70% of respondents agree) and its ability to facilitate peer-to-peer (P2P) payments without intermediaries (54%).

However, only 11% of respondents believe that Bitcoin meets environmental, social and governance (ESG) criteria.

Blockchain’s Image Problem in Germany

The W3NOW survey also sheds light on the challenges hindering wider blockchain adoption in Germany. Regulatory uncertainty, a lack of user-friendly applications, negative media coverage, and a shortage of skilled professionals were identified as major obstacles.

“In many cases, blockchain is associated with cryptocurrencies and their volatile markets, which leads to a misleading perception of the technology among the general public,” the report states. “This negative media coverage makes it difficult to build trust in blockchain solutions and to position the technology as a versatile and secure foundation for a wide range of applications.”

The authors of the study concluded:

“However, it’s important to emphasize that many blockchain applications with potentially high economic relevance are not directly in contact with end-users. Instead, blockchain technology is often used in the background, without media visibility, which somewhat reduces the relevance of public awareness for broader blockchain adoption.”

To foster better blockchain adoption in Germany, the report’s authors advise closer collaboration between universities and businesses, creating clear and innovation-friendly regulations, and focusing research on how blockchain can be used in specific industries, particularly those related to ESG compliance and the synergy between blockchain and AI.