Decentralized Identity Market

Market Definition

Decentralized identity is a digital identity framework that enables individuals and organizations to control and manage their identity data independently, without relying on a central authority. Built on blockchain or distributed ledger technology, it provides secure and verifiable credentials that can be shared across platforms while preserving user privacy and consent. 

These solutions are widely used in financial services, healthcare, education, and public sector applications for authentication, access control, and compliance. The market comprises platforms and services that support identity issuance, verification, and management across decentralized digital ecosystems.

The global decentralized identity market size was valued at USD 821.2 million in 2024 and is projected to grow from USD 1,357.7 million in 2025 to USD 69,026.3 million by 2032, exhibiting a CAGR of 75.28% during the forecast period. This growth is attributed to the rising adoption of decentralized identity solutions across finance, healthcare, government, and education. 

Increasing demand for secure and user-controlled digital identities, along with growing concerns over data privacy and identity theft, drives the integration of decentralized frameworks into authentication and access management systems.

Key Highlights

1. The decentralized identity industry size was valued at USD 821.2 million in 2024.
2. The market is projected to grow at a CAGR of 75.28% from 2025 to 2032.
3. North America held a share of 37.00% in 2024, valued at USD 303.8 million.
4. The biometrics segment garnered USD 459.9 million in revenue in 2024.
5. The platform/software segment is expected to reach USD 50,132.8 million by 2032.
6. The small & medium enterprises (SMEs) segment is anticipated to register the fastest CAGR of 77.00% over the forecast period.
7. The cloud-based segment garnered USD 550.2 million in revenue in 2024.
8. The government & public sector segment is expected to reach USD 15,494.6 million by 2032.
9. The market in Asia Pacific is anticipated to grow at a CAGR of 80.98% during the forecast period.

Major companies operating in the decentralized identity market are Microsoft, IBM, Accenture, Wipro, Persistent Systems, Nuggets, Validated ID, SL, Civic, 1Kosmos Inc., Ping Identity, Antiersolutions, Fractal ID, Hu-manity.co, Dragonchain, and Finema Co., Ltd.

Decentralized Identity Market Report Scope

Decentralized Identity Market Regional Analysis

Based on region, the market has been classified into North America, Europe, Asia Pacific, the Middle East & Africa, and South America.

North America decentralized identity market share stood at around 37.00% in 2024, valued at USD 303.8 million. This market dominance is reinforced by the region’s advanced digital infrastructure, early implementation of blockchain-based identity solutions, and the presence of key technology providers specializing in decentralized identity platforms.

Furthermore, rising regulatory focus on data privacy, widespread adoption of digital financial services, and strategic collaborations between public agencies and private firms are accelerating the deployment of decentralized identity solutions across various sectors.

The region’s commitment to enhancing digital trust and securing online interactions continues to drive the market. Growing demand for secure remote access, cross-border identity verification, and scalable authentication solutions, along with ongoing innovation in privacy-preserving technologies, strengthens North America’s position in the market.

• In February 2025, LF Decentralized Trust announced the addition of CREDEBL, a scalable decentralized identity platform, along with the release of Hyperledger Iroha 2.0. The update introduces modular architecture, enhanced permissioning, and smart contract support to advance digital identity and asset management.

The decentralized identity industry in Asia Pacific is set to grow at a CAGR of 80.98% over the forecast period. This growth is attributed to rapid digitalization, expanding mobile connectivity, and the rising demand for secure identity solutions across developing economies in the region.

The market in Asia Pacific is benefiting from government-led digital identity programs, blockchain research initiatives, and public-private partnerships aimed at improving data privacy and access to digital services. The growing adoption of decentralized identity in sectors such as fintech, healthcare, and education is supporting the regional growth.

The emphasis on digital inclusion, particularly for rural and unbanked populations, is accelerating the development of user-centric identity frameworks. The region’s thriving startup ecosystem, increasing venture capital activity, and favorable regulatory environments are further driving the innovation and deployment of decentralized identity technologies throughout Asia Pacific.

• In August 2024, Japan-based Dai Nippon Printing (DNP) launched a Decentralized ID Management Platform that enables the issuance and verification of verifiable credentials through decentralized identifiers (DIDs). Designed to meet international standards, the platform supports secure digital identity management and includes wallet functionality, with initial deployment targeting markets in Australia.

Decentralized Identity Market Overview

The growing emphasis on regulatory compliance, cross-border digital identity verification, and seamless user onboarding is fueling market expansion. Additionally, advancements in blockchain technology, interoperability standards, and digital wallets, along with increasing investments in Web3 and self-sovereign identity ecosystems, are accelerating market development.

• In April 2025, Veriff partnered with Trident3 to enhance decentralized identity verification across Web3 platforms. The collaboration integrates Veriff’s AI-driven authentication with Trident3’s T3id infrastructure, enabling secure and user-controlled identity verification for DeFi onboarding, age verification, and regulated token access.

Market Driver

Growing Adoption of Blockchain Technology

The decentralized identity market is propelled by the increasing integration of blockchain technology to enhance digital trust, data security, and user control. Traditional identity systems face mounting challenges like data breaches, identity theft, and centralized vulnerabilities, prompting organizations to adopt blockchain-based frameworks that provide tamper-proof and verifiable credentials. These solutions enable individuals to securely manage and share their identity information while minimizing dependence on third-party intermediaries.

This transition is further supported by the rising demand for privacy-focused authentication, cross-platform interoperability, and efficient user verification processes. The adoption of blockchain across finance, healthcare, and government continues to strengthen the shift toward decentralized identity systems, accelerating the overall market growth.

• In February 2023, Wipro Lab45 launched DICE ID, a blockchain-based decentralized identity and credential exchange platform. It allows users to store verified credentials in a secure digital wallet, enabling tamper-proof issuance and instant verification. The platform enhances privacy and control over personal data, with applications spanning employment, healthcare, and financial services.

Market Challenge

Lack of Standardization and Interoperability

Lack of standardization and interoperability remains a significant challenge in the decentralized identity market, restricting seamless integration across platforms, applications, and jurisdictions. The absence of universally accepted protocols and frameworks leads to implementations that hinder the consistent exchange and verification of digital credentials.

This inconsistency limits scalability, complicates cross-border identity use cases, and delays enterprise adoption, particularly in sectors that require high levels of compliance and system compatibility.

Industry leaders and regulatory bodies are advancing global standards like Decentralized Identifiers (DIDs) and Verifiable Credentials (VCs) through initiatives such as those which is led by the World Wide Web Consortium (W3C). Collaborations among identity providers, developers, and enterprises, along with investments in interoperability testing and open-source frameworks are key to building a unified and scalable decentralized identity ecosystem.

Market Trend

Widespread Adoption of Self-Sovereign Identity (SSI) Frameworks

The adoption of SSI frameworks is reshaping the decentralized identity market by enabling users to own, manage, and share their identity data without relying on centralized authorities. This approach enhances privacy, ensures user consent, and provides greater control over personal information across digital platforms. SSI solutions are increasingly being used for secure authentication, credential verification, and regulatory compliance in finance, healthcare, and public services.

The integration of blockchain technology and cryptographic protocols supports tamper-proof and verifiable credentials, while decentralized identifiers (DIDs) and verifiable credentials (VCs) ensure interoperability and trust. Additionally, digital wallets and mobile-first applications are simplifying user access and management, making decentralized identity more accessible.

• In February 2025, Elsevier’s Technology in Society published a study titled “Self-Sovereign Identity Adoption: Antecedents and Potential Outcomes”, which identifies trust, privacy concerns, regulatory support, and governance as key drivers of SSI adoption. It highlights benefits such as enhanced user autonomy, improved identity management, and stronger digital ecosystems.

Market Segmentation

• By Identity Verification Method (Biometrics and Non-biometrics): The biometrics segment earned USD 459.9 million in 2024, due to the growing demand for secure, user-friendly, and fraud-resistant identity verification methods.
• By Component (Platform / Software and Services): The platform/software segment held 68.00% share of the market in 2024, due to its critical role in enabling identity creation, credential management, and integration with decentralized applications.
• By Organization Size (Large Enterprises and Small & Medium Enterprises (SMEs)): The large enterprises segment is projected to reach USD 52,649.1 million by 2032, owing to increasing investments in advanced identity solutions to enhance security, regulatory compliance, and seamless user access across complex digital infrastructures.
• By Deployment Mode (On-premise and Cloud-based): The cloud-based segment is anticipated to grow at a CAGR of 83.05% through the forecast period, mainly due to its scalability, cost-efficiency, and ease of integration with decentralized identity frameworks across diverse digital environments.
• By End User (BFSI (Banking, Financial Services & Insurance), Government & Public Sector, Healthcare, Telecom & IT, Retail & E-commerce, Travel & Hospitality, Education, Energy & Utilities, and Others): The BFSI (Banking, Financial Services & Insurance) segment held a market share of 20.00% in 2024, largely attributed to the growing need for secure, compliant, and user-controlled digital identity solutions to combat fraud, streamline KYC processes, and enhance customer trust.

Regulatory Frameworks

• In the European Union (EU), the eIDAS 2.0 Regulation regulates digital identity and trust services. It mandates the development of a European Digital Identity Wallet and enables the cross-border recognition of electronic IDs, supporting interoperability and privacy in decentralized identity systems.
• In India, the Data Empowerment and Protection Architecture (DEPA) regulates consent-based data sharing. It enables individuals to control access to their personal data through secure digital frameworks, aligning with decentralized identity principles across financial and healthcare domains.
• In China, the China RealDID system regulates blockchain-based real-name decentralized identity. It requires real-name authentication integrated with privacy-preserving decentralized identifiers (DIDs) to ensure secure and compliant digital identity usage across the country. 

Competitive Landscape

Companies operating in the decentralized identity industry are actively working to expand their presence through technological innovation, platform diversification, and strategic alliances. Key players are investing significantly in blockchain infrastructure, privacy-preserving cryptographic techniques, and interoperability standards to develop secure, user-centric, and scalable identity solutions suited for a wide range of digital applications.

They are also focusing on the development of decentralized identity wallets, verifiable credential systems, and zero-knowledge proof integrations to meet the evolving demands of data security, compliance, and seamless authentication.

Additionally, firms are partnering with governments, regulatory bodies, and industry consortiums to support national identity programs, influence global standards, and accelerate adoption across financial services, healthcare, education, and public sectors in developed and emerging markets.

• In June 2025, cheqd partnered with VERA to launch a verified decentralized identity and secure B2B messaging platform. The solution combines cheqd’s identity infrastructure with VERA’s encrypted communications, enabling tamper-proof credential exchange and fraud-resistant invoicing, with initial deployment in South Africa.

Key Companies in Decentralized Identity Market:

• Microsoft
• IBM
• Accenture
• Wipro
• Persistent Systems
• Nuggets
• Validated ID, SL
• Civic
• 1Kosmos Inc.
• Ping Identity
• Antiersolutions
• Fractal ID
• Hu-manity.co
• Dragonchain
• Finema Co., Ltd.

Recent Developments (Partnerships/Launch)

• In March 2025, Identity Fusion Inc. partnered with Dock Labs to integrate verifiable credential technology into its identity and access management solutions. The collaboration bridges legacy systems with next-generation decentralized identity, enabling secure and reusable digital credentials, reducing fraud, and improving user onboarding experiences.
• In November 2024, the Algorand Foundation joined the Decentralized Identity Foundation (DIF), reinforcing its commitment to open standards in decentralized identity. The move officially recognizes did:algo, Algorand’s W3C-compliant decentralized identifier (DID), and supports its adoption, including use cases like disaster relief identity verification through the Kare Wallet.
• In March 2023, Ping Identity introduced PingOne Neo, a new decentralized identity management solution that gives individuals full control over digital credentials and reduces enterprise dependency on heavy backend integrations. It enables users to securely request, receive, and share cryptographically signed verifiable credentials via digital wallets, improving privacy, reducing fraud risk, and streamlining identity verification.