Decentralized Identity Market Size, Share, and Industry Analysis, By Type (Biometric and Non-Biometric), By Organization Type (SMEs and Large Enterprises), By Industry (Banking and Finance, Government, Healthcare, Telecom, IT, Retail and E-Commerce, and Others (Transport, Real Estate)), and Regional Forecast, 2026-2034

The decentralized identity market includes solutions that offer decentralized identity management, which is gaining traction due to the inefficiencies of existing identity management tools. This technology represents a significant shift away from centralized identity solutions, utilizing blockchain to securely store and manage identity data while giving users greater control over their personal information.

Impact of AI on the Decentralized Identity Market

Decentralized identity systems incorporating AI can offer significant benefits for managing digital identities by empowering users to control their data and enhancing security. These advantages rely on technologies such as blockchain and cryptography, which create a set of verifiable and portable credentials. AI algorithms can be employed to verify the authenticity of these credentials, further strengthening security. Additional benefits include improved data privacy and security through secure and controlled data sharing and simplified identity management that reduces complexity. Different companies also incorporate AI technology with decentralized identity to create a new, innovative segment for their portfolio. For instance,

• In November 2024, Nuggets, known for its decentralized digital identity and payments platform, launched two new products: the Private Personal AI and the Verified Identity for AI Agents.

Decentralized Identity Market Driver

Increasing Concerns about Data Privacy and Security Breaches Drive Market Growth

As concerns about data privacy and security breaches continue to rise, advanced security systems are experiencing rapid growth. Centralized systems are vulnerable to potential data breaches and unauthorized access, highlighting the need for decentralized identity systems. Furthermore, the increase in identity theft and fraud is prompting organizations and users to adopt more secure forms of security. Another factor contributing to market growth is the complete control and ownership of personal data that decentralized identity systems provide. Due to these factors, different companies leverage decentralized identity technologies to improve their identification systems. For instance, 

• In April 2025, Web3.bio partnered with Sign to boost current decentralized identity verification by leveraging advanced technologies to revolutionize Web3 profile management and overall social reputation.

Decentralized Identity Market Restraint

Complexity and Interoperability might Restrict Market Growth

Compared to traditional centralized identity systems, decentralized identity systems are more complex for organizations and users. This complexity arises from factors such as the necessity for users to manage their cryptographic keys and the reliance on blockchain technology and cryptography, which can present challenges related to data storage and user anonymity.

Moreover, interoperability poses a significant barrier, as different decentralized identity systems may not be compatible. This incompatibility is primarily due to the varying characteristics of different blockchains. Additionally, scalability, regulatory compliance, and achieving widespread user adoption are associated with challenges.

Decentralized Identity Market Opportunity

Extensive Applications in Different Industries Will Create Opportunity for Market Growth

Decentralized identity solutions have a wide range of applications across various industries. 

In finance, these solutions can provide banks with reusable KYC (Know Your Customer) credentials and offer verification services for fintech companies and cryptocurrency exchanges. 

In healthcare, they enable verifiable medical licenses, patient consent management, and secure data sharing, allowing patients to control their information. For instance, 

• In March 2025, WISeKey announced that its WISeID.COM platform is launching an advanced method for securing healthcare data using blockchain-based digital identities. This platform facilitates decentralized consultations through encryption and self-sovereign identity concepts, allowing patients full control over their medical records.

In education, decentralized identity systems can issue portable diplomas, transcripts, and certifications, making it easier for individuals to share their credentials with employers and institutions.

Similarly, in government, digital state IDs and verifiable credentials for public data can enhance security, reduce identity theft and fraud, and help protect citizen data.

Due to these factors influencing market opportunity, different companies have already started taking steps to make technological advancements in the field. For instance, 

• In October 2024, Soileum Networks, a visionary in the blockchain environment, is leading the charge in transforming decentralized identity solutions through its innovative Secure Open Identity Layer (SOIL) technology. 

Key Insights

The report covers the following key insights:

• Micro Macro Economic Indicators
• Drivers, Restraints, Trends, and Opportunities
• Business Strategies Adopted by the Key Players
• Impact of AI on the Decentralized Identity Market
• Consolidated SWOT Analysis of Key Players

Segmentation

Analysis by Type

By type, the market is divided into biometric and non-biometric.

The biometric segment is widely recognized as the dominant player in the decentralized identity market. However, the non-biometric segment is also experiencing rapid growth, driven by user convenience and technological advancements such as token-based verification and passwordless authentication. Biometric technologies, such as fingerprint and facial recognition, are preferred on a large scale due to their secure and efficient verification capabilities. For instance,

• In May 2024, Humanity Protocol, known for using palm prints for identity verification, raised USD 30 million. It was valued at USD 1 billion for decentralized identification to rival WorldCoin, which uses iris scans for its verification technology.

Analysis by Organization Size

By organization type, the market is divided into SMEs and large enterprises.

In today's world, the adoption of emerging technologies in decentralized identity is on the rise, with both small and medium-sized enterprises (SMEs) and large corporations participating in this trend. However, large enterprises tend to dominate the market due to their greater resources and a strong emphasis on security. Decentralized identity offers several benefits for organizations, including a streamlined employee onboarding process and improved user data privacy.

Analysis by Industry

By industry, the market is divided into banking and finance, government, healthcare, telecom, IT, retail and e-commerce, and others (transport, real estate).

The banking and finance industry currently leads the decentralized identity market, largely due to the critical security requirements in Know Your Customer (KYC) processes. Advanced decentralized identity solutions are recognized as a secure and efficient means of managing customer identities and data, a vital factor in this sector. For instance, 

• In September 2024, Frax Finance launched the Frax Name Service (FNS), a decentralized identity service that allows users to register unique names on the Frax blockchain.

Regional Analysis

By region, the market is divided into North America, Europe, Asia Pacific, the Middle East & Africa, and South America.

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North America currently leads the decentralized identity market. This dominance can be attributed to several factors, including significant investments in research and development, a well-established industry infrastructure, and widespread adoption across various sectors. Additionally, a strong economy, technological innovation, a diverse market, and government regulations promoting identity security all contribute to the growth of the decentralized identity market and the increasing demand for secure identity verification. For instance,

• In May 2025, Openverse Network, a blockchain infrastructure platform based in the US, raised USD 11 million in a strategic funding round. The company provides innovative technologies such as VTP, ONS, UID, IBC, and UT.

Furthermore, the presence of key players in the industry also plays a crucial role in North America's market leadership.

Following North America, the Asia Pacific region is currently the leader in the decentralized identity market. Several factors, including high technology penetration, increasing incidents of cybercrime and fraud, and a growing emphasis on digital identity solutions across various sectors such as finance, healthcare, and government, drive this growth. Additionally, many organizations are actively working on developing decentralized identity solutions. For instance,

• In June 2024, according to a report by the Nikkei, Japan's three largest banks—MUFG, SMBC, and Mizuho—are partnering with two regional banks, Shizuoka and Fukuoka Financial, to develop a digital identity solution. Furthermore, these three big banks support the Progmat tokenization solution founded by MUFG.

Key Players Covered

The global decentralized identity market consists of a large number of group and standalone providers. 

The report includes the profiles of the following key players:

• Antier Solutions (India)
• Evernym (U.S.)
• Hu-manity.co (U.S.)
• Civic Technologies (U.S.)
• Fractal Analytics Inc. (U.S.)
• 1Kosmos Inc. (U.S.)
• Persona Identities, Inc. (U.S.)
• Stripe, Inc. (U.S.)
• Nametag Inc. (U.S.)
• Polygon Labs UI (Cayman) Ltd. (U.S.)
• Spruce Systems, Inc. (U.S.)
• Galxe Foundation. (U.S.)

Key Industry Developments

• In February 2025, Bitgert, a crypto platform, announced a partnership with FNS, a decentralized domain name service, to enhance Web3 solutions by combining their blockchain and centralized exchanges with innovative domain services.
• In May 2024, MicroStrategy introduced MicroStrategy Orange, a Bitcoin-centric decentralized identity system. This open-source system utilizes Ordinal-based inscriptions for efficient data management and can handle approximately 10,000 decentralized identifiers for every Bitcoin transaction.