Decentralized Identity Market

Decentralized Identity Market Overview:

The global decentralized identity market size was valued at USD 1,153 Million in 2024. Looking forward, IMARC Group estimates the market to reach USD 89,628 Million by 2033, exhibiting a CAGR of 62.2% during 2025-2033. North America dominated the market, holding a significant market share of 35.0% in 2024. The rising concerns for more control and ownership over personal data, increasing adoption of industrial applications based on blockchain identity, and the rapid digitalization represent some of the factors contributing to the decentralized identity market share.

The market is driven by several factors. Increasing concerns about data privacy and user control over personal information push individuals and organizations toward more secure, self-sovereign identity solutions. Traditional centralized systems are vulnerable to data breaches and misuse, motivating the shift to decentralized models. Additionally, the rise in cyber threats and identity theft makes secure digital identities essential for protecting sensitive data. Regulatory pressures, such as GDPR and other data protection laws, are encouraging businesses to adopt systems that provide greater control and transparency. Blockchain technology plays a key role, offering features like immutability, transparency, and enhanced security, making decentralized identity systems more reliable and trustworthy. As per the decentralized identity market forecast, these technologies are seen as essential to modernizing identity verification, improving security, and enabling seamless user experiences across digital platforms.

In the US, a new mobile application allows users to manage decentralized identities on iOS and Android, offering secure, privacy-focused identity verification and age validation. This solution simplifies KYC processes for businesses by utilizing blockchain-based digital IDs, enabling users to store and present verifiable credentials while maintaining control over their personal information. For instance, in January 2025, Identity.com released a decentralized identity management mobile application on iOS and Android. Users can store and present verifiable credentials while facilitating identity verification and age verification based on privacy as well as self-sovereign identity, making KYC processes easier for companies through blockchain-based digital ID solutions.

Decentralized Identity Market Trends:

Emerging Data Privacy Issues and Call for Ownership

One of the biggest factors propelling the decentralized identity market trends is the heightening of awareness and interest in data privacy and personal ownership of individual information. As more personal information gets collected and stored by organizations, individuals are getting increasingly careful about their data being handled, shared, and secured. According to a recent industry report, more than 60% of large businesses are expected to be using at least one Privacy-Enhancing Technology (PET) solution by the end of 2025, indicating strong market momentum toward more secure identity systems. Most existing identity management systems use centralized intermediaries and are therefore susceptible to data breaches, unauthorized disclosures, and cyberattacks. An industrial report highlights that the total global cost of financial crime compliance has reached USD 275.13 Billion annually, underlining the urgent need for efficient, secure, and cost-effective identity solutions. Decentralized identity solutions provide users with more control by enabling them to control and publish their credentials without depending on a central point of authority. This structure lowers data exposure and maximizes user privacy. The increase in data protection regulations around the world, like GDPR and others like it, is also making user-centric identity systems more necessary. As online interaction continues to expand across platforms, the need for secure and independent identity solutions is poised to accelerate, making decentralized identity a revolutionary change in digital privacy.

Adoption Across Industrial Applications and Digital Platforms

Technologies are observing wider adoption in a broad variety of industries as their strengths in offering verifiable, secure, and user-managed identity management shape the decentralized identity market outlook. In industries like healthcare, retail, manufacturing, and finance, decentralized systems simplify authentication, halt identity theft, and improve data integrity. For example, in healthcare, medical record access and patient identity verification can be safely accommodated without the need for storage in a central location, lessening the risk of privacy breaches. In finance and banking, combining blockchain-based identity for know your customer (KYC) enhances compliance, accelerates onboarding, and minimizes duplication. Retailers are embracing decentralized identity to customize services while protecting customer information. Governments and public agencies also look at digital IDs for e-governance, taxation, and social security. In this context, the European Parliament has outlined that 80% of EU citizens are expected to use digital ID by 2030 as part of Europe’s ‘Path to the Digital Decade’ strategy. This industry-wide shift is driven by the necessity of frictionless, secure, and interoperable identity systems that build user confidence. As enterprise digitalization increases in depth, decentralized identity technologies are becoming essential to ensuring and scalable operations in worldwide markets.

Technological Advancements and Strategic Initiatives

Emerging fast in enabling technologies like artificial intelligence (AI), machine learning (ML), blockchain, and the Internet of Things (IoT) are powering solutions immensely, impelling decentralized identity market growth. These technologies enable smarter, more adaptive, and secure verification mechanisms for identity that can work in real time on multiple devices and platforms. Blockchain provides immutability and transparency, while AI and ML help to detect anomalies and fraud. IoT integration enables identity verification in networked contexts, including smart home and industrial automation contexts. As well, government encouragement and policy programs are driving adoption, especially in e-governance and digital public infrastructure areas. Key players' strategic maneuvers, mergers, acquisitions, and joint ventures are also driving innovation and decentralized identity market share. Firms are coming together to create scalable identity architectures that meet global compliance requirements. Combined, these technologies and strategic advances are creating a vibrant ecosystem, affirming decentralized identity's role as the foundation of future-proof digital trust frameworks.

Decentralized Identity Industry Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the global decentralized identity market, along with forecasts at the global, regional, and country levels from 2025-2033. The market has been categorized based on type, enterprise size, and vertical.

Analysis by Type:

• Non-Biometric
• Biometric

Biometric stood as the largest type in 2024, holding around 64.0% of the market due to its growing adoption for identity verification. Biometrics, such as facial recognition, fingerprints, and iris scans, offer a high level of security and convenience, making them increasingly popular for securing decentralized identity systems. As privacy concerns rise, decentralized identity systems, which give users control over their personal information, are becoming essential. Biometrics enhance these systems by providing unique, difficult-to-replicate identifiers that reduce fraud and ensure a more seamless user experience. The demand for secure online transactions, coupled with the increasing reliance on digital services, propels the integration of biometric authentication in decentralized identity solutions. This shift toward biometric-powered decentralized systems is expected to drive market growth, especially in sectors like finance, healthcare, and government services.

Analysis by Enterprise size:

• Large Enterprises
• Small and Medium-sized Enterprises

Large enterprises led the market with around 65.2% of market share in 2024, owing to their need for more secure, efficient, and scalable identity management solutions. These organizations are increasingly adopting decentralized identity systems to address the challenges posed by traditional centralized identity models, such as data breaches and identity theft. Decentralized identity offers greater control, privacy, and security by enabling individuals to manage their personal data without relying on third-party authorities. For large enterprises, this shift helps streamline onboarding processes, reduce fraud, and improve compliance with data privacy regulations like GDPR. Additionally, these companies are investing in decentralized identity solutions to enhance customer trust, simplify user authentication, and reduce operational costs. As a result, large enterprises’ growing focus on digital transformation and security is accelerating the demand for decentralized identity technologies.

Analysis by Vertical:

• BFSI
• Government
• Healthcare and Life Sciences
• Telecom and IT
• Retail and E-Commerce
• Transport and Logistics
• Real Estate
• Media and Entertainment
• Travel and Hospitality
• Others

BFSI led the market with around 19.3% of market share in 2024 because of its heightened focus on security, privacy, and compliance. Financial institutions are increasingly turning to decentralized identity systems to mitigate risks associated with identity theft, fraud, and data breaches. These solutions allow customers to securely manage their personal data, reducing the need for centralized databases that are vulnerable to cyberattacks. Additionally, decentralized identity supports better regulatory compliance by ensuring that data is handled according to strict privacy standards like GDPR. The BFSI sector also benefits from improved customer experiences, faster onboarding, and simplified KYC (Know Your Customer) processes, while maintaining control over sensitive information. As financial institutions push for more efficient, secure, and user-centric digital services, the demand for decentralized identity solutions continues to grow.

Regional Analysis:

• North America
  • United States
  • Canada
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Australia
  • Indonesia
  • Others
• Europe
  • Germany
  • France
  • United Kingdom
  • Italy
  • Spain
  • Russia
  • Others
• Latin America
  • Brazil
  • Mexico
  • Others
• Middle East and Africa

In 2024, North America accounted for the largest market share of 35.0%. The region boasts a robust technological ecosystem, with leading blockchain companies, startups, and developers pushing the boundaries of innovation. Investment in blockchain technology and decentralized systems is particularly high, with significant venture capital funding directed toward identity-related projects. Regulatory frameworks in countries like the US and Canada have also played a crucial role, providing clear guidelines that foster innovation while ensuring privacy and security. Moreover, the increasing demand for secure and self-sovereign digital identities, driven by industries such as finance, healthcare, and government services, has accelerated the adoption of decentralized identity solutions. These combined factors have positioned North America as a global leader in the development and implementation of decentralized identity technologies.

Key Regional Takeaways:
 

United States Decentralized Identity Market Analysis

In 2024, the United States accounted for 83.8% of the market share in North America. The decentralized identity market in the United States is witnessing strong momentum due to a growing focus on digital privacy and self-sovereign identity frameworks. The region benefits from a digitally mature population increasingly concerned with data breaches and unauthorized access to personal information. A recent report states that 92% of Americans are concerned about their privacy when using the internet, highlighting the urgency for secure, user-centric identity solutions. Public and private sector interest in verifiable credentials is further supporting the development of secure digital identity ecosystems. The integration of decentralized identity protocols into emerging technologies such as blockchain, artificial intelligence, and smart contracts is contributing to innovation in identity authentication. Additionally, the push for digital transformation in the government and enterprise sectors is accelerating adoption. Financial services and online platforms are investing in decentralized solutions to improve user trust while reducing friction in identity verification. The increasing volume of remote onboarding and digital interactions has also created a demand for identity frameworks that ensure high assurance and user control. The United States is fostering a regulatory environment conducive to the development of decentralized identity, with a growing emphasis on interoperability, ethical data handling, and user consent.

Europe Decentralized Identity Market Analysis

Europe’s decentralized identity market is expanding steadily, driven by the region’s stringent data protection regulations and strong public awareness around digital rights. The implementation of secure identity systems aligns with the European commitment to digital trust and privacy-preserving technologies. According to the UK government, in 2023/2024, 266 UK digital identity firms, including 227 dedicated providers and 39 diversified firms, generated approximately USD 2.72 Billion in annual revenue, reflecting robust market activity and investor confidence in the digital identity sector. The emphasis on secure cross-border digital services and identity verification for e-government platforms is stimulating demand for decentralized identity solutions. Additionally, the rise of digital wallets and interoperable credentials is fostering innovation in identity systems for public services and cross-sectoral applications. Europe is also witnessing growing interest in decentralized identities to support digital health records, educational certifications, and workforce credentials. The drive to reduce administrative burdens in both public and private transactions is prompting organizations to explore user-centric identity frameworks, further enhancing market adoption.

Asia Pacific Decentralized Identity Market Analysis

The decentralized identity market in Asia Pacific is experiencing notable growth due to rapid digitalization and increasing investments in identity infrastructure. As mobile-first economies expand, there is rising demand for secure, user-controlled digital identities that can facilitate frictionless transactions and access to services. An industry report notes that the rate of face authentication using India’s Aadhaar digital ID system is on a steady growth trajectory, with over one Billion transactions completed to date, underscoring widespread acceptance of digital identity frameworks. Technological innovation, coupled with high adoption of digital platforms, is encouraging the integration of decentralized identity systems across sectors such as fintech, education, and online commerce. The region is also leveraging decentralized identity to enhance trust in digital interactions and ensure inclusive access to services, particularly in underbanked and remote areas. With a youthful, tech-savvy population driving digital engagement, decentralized identity is emerging as a solution to streamline authentication while preserving privacy.

Latin America Decentralized Identity Market Analysis

Latin America's decentralized identity market is gaining traction with the growing shift toward secure digital identity alternatives to traditional verification models. The region is seeing an expansion in digital public services and fintech platforms, which are promoting the need for privacy-enhancing and user-controlled identity systems. According to the Brazilian National Renewal Plan (NR), by 2026, 25% of Brazilian industrial companies are expected to be digitally transformed, with this figure projected to rise to 50% by 2033, signifying increasing demand for robust identity frameworks to support digital operations. Rising digital transactions and increasing use of mobile platforms are driving the search for more secure and accessible identity solutions. Additionally, the region's focus on inclusive digital services is propelling interest in decentralized identity to bridge gaps in access and verification.

Middle East and Africa Decentralized Identity Market Analysis

The Middle East and Africa are witnessing emerging demand for decentralized identity solutions driven by the rise of digital infrastructure projects and smart service initiatives. As regional economies advance their digital agendas, there is a growing emphasis on secure, portable identity frameworks that support seamless access to digital services. According to the Saudi Press Agency, the Ministry of Interior has issued over 28 Million unified digital identities through its “Absher” platform, reflecting large-scale adoption of digital identity systems. The adoption of decentralized identity is being explored to enhance authentication processes while maintaining user sovereignty. The increasing reliance on mobile-first platforms and cloud services is also encouraging the use of decentralized models to improve access and streamline identity verification across sectors.

Competitive Landscape:

The decentralized identity market is seeing strong activity in several areas, including product launches, partnerships, funding, government initiatives, and research. Partnerships and collaborations are common as companies join forces to enhance the adoption of decentralized identity systems. Government initiatives are also growing, with many countries exploring or implementing frameworks for digital identity. Research and development continue to focus on improving the security, privacy, and scalability of decentralized identity solutions. Funding rounds are increasing, supporting startups and established firms in building innovative identity verification solutions. Overall, partnerships, collaborations, and funding are among the most common practices currently shaping the market.

The report provides a comprehensive analysis of the competitive landscape in the decentralized identity market with detailed profiles of all major companies, including:

• 1Kosmos Inc
• Avast Software s.r.o.
• Dragonchain
• Finema Co. Ltd
• Microsoft Corporation
• Nuggets
• Serto
• Validated ID SL
• Wipro Limited

Latest News and Developments:

• June 2025: Moca Foundation launched Moca Chain, a new EVM-compatible layer-1 blockchain focused on decentralised, privacy-preserving identity verification. It used ZK-TLS, cross-chain identity oracles, and decentralised storage to secure digital identities. Integrated with AIR Kit, it extended reach to over 700 million users through partners like OK Cashbag and One Football.
• May 2025: SPACE ID collaborated with Floki to introduce the Floki Hub, a decentralized identity solution based on $FLOKI and .floki domains. The hub allows users to construct Web3 profiles, display NFTs, and generate decentralized resumes, representing a major milestone in on-chain identity and digital ownership technology.
• April 2025: BioMatrix introduced iPoY, the first token in its Proof of You (PoY) system, integrating biometric identity with AI-powered GameFi. Users verified themselves via facial scans, earning rewards across the ecosystem. iPoY surged 300x post-launch, positioning identity as core to gaming, social engagement, and AI-assisted participation in decentralised digital economies.
• April 2025: The Cardano Foundation launched Veridian, a quantum-resistant, open-source platform for secure digital identity. Built on Cardano, Veridian enabled users to self-manage decentralized identifiers (DIDs) and verifiable credentials. Designed for cross-border use, it supported industries like finance and healthcare while offering post-quantum security and full data control via a mobile wallet.

Decentralized Identity Market Report Scope:

Key Benefits for Stakeholders:

• IMARC’s report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the decentralized identity market from 2019-2033.
• The decentralized identity market research report provides the latest information on the market drivers, challenges, and opportunities in the global market.
• The study maps the leading, as well as the fastest-growing, regional markets. It further enables stakeholders to identify the key country-level markets within each region.
• Porter's five forces analysis assist stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the decentralized identity industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.