Decentralized Identity Systems Market Share Driven by Rising Demand for Secure and User-Controlled Digital Identity | Valuates Reports

Decentralized Identity Systems Market Size
The global market for Decentralized Identity Systems was valued at US$ 760 million in the year 2024 and is projected to reach a revised size of US$ 24850 million by 2031, growing at a CAGR of 65.5% during the forecast period.

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The decentralized identity systems market is witnessing robust market growth, propelled by increasing concerns over data privacy, growing digital transformation initiatives, and the need for secure, user-controlled identity verification solutions. Market trends show rapid adoption across industries as blockchain, zero-knowledge proofs, and self-sovereign identity frameworks redefine how personal data is stored and shared. The rising market size is supported by regulatory moves toward stronger data protection and a shift away from centralized databases prone to breaches and misuse.

By type, the biometric segment currently holds the largest market share, driven by the integration of fingerprint, facial recognition, and iris scanning technologies with blockchain-based identity platforms. These solutions are gaining traction for their accuracy, security, and user convenience. The non-biometric segment, encompassing passwordless authentication, cryptographic keys, and decentralized identifiers, is expected to grow at a faster pace as enterprises and governments explore flexible, privacy-first identity models for diverse user bases.

In terms of application, the BFSI sector leads the market share due to the critical need for fraud prevention, KYC compliance, and secure digital onboarding. Government applications are rapidly expanding as digital ID programs adopt decentralized frameworks to enhance citizen privacy and trust. Healthcare and life sciences are also emerging as high-growth areas, leveraging decentralized identity for patient data security and interoperability. Other sectors, including telecom and IT, retail and e-commerce, transport and logistics, and media & entertainment, are increasingly exploring decentralized identity to improve authentication and customer trust while reducing operational risks.

The market forecast indicates strong long-term growth fueled by advancements in blockchain scalability, interoperability standards, and AI-driven identity analytics. With increasing adoption of Web3 ecosystems and the proliferation of IoT devices, decentralized identity systems are poised to become a cornerstone of secure digital interactions. Strategic partnerships between technology providers, governments, and industry consortia will continue to shape market trends, driving innovation and expanding real-world use cases across sectors.

Segment by Type
• Biometric
• Non-biometric

Segment by Application

• BFSI
• Government
• Healthcare and Life Sciences
• Telecom and IT
• Retail and E-Commerce
• Transport and Logistics
• Media & Entertainment
• Other
By Company

Microsoft, Avast, Ping Identity, 1Kosmos, IBM, R3, Civic Technologies, InfoCert, Ontology, Spruce ID, TrueVett (VeriME), Dock Labs, Finema, Metadium, Affinidi, Datarella, Infopulse, Dragonchain, Validated ID, Serto, Blockster Labs, Nuggets

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