Originally published on: December 09, 2024
In a recent study of Australia’s fintech landscape conducted by KPMG, it was revealed that over 7% of fintech companies based in the country closed their doors in 2024, with the blockchain and cryptocurrency sector bearing the brunt of the losses.
The report highlighted a significant decrease in the number of independent fintech firms in Australia over the past two years, dropping from 800 firms in 2022 to 767 by the end of 2024. Of the 60 fintech firms that ceased operations in 2024, blockchain and crypto companies accounted for 14% of the closures.
According to the findings, 4.5% of the firms closed down entirely, while 3% were a result of mergers and acquisitions. Many of the M&A transactions were driven by strategic motives, with buyers aiming to bolster specific capabilities.
The decline in blockchain and crypto firms was attributed to the surge in interest in artificial intelligence. However, recent positive developments in the crypto space, such as the approval of spot Bitcoin exchange-traded funds in the US, may help reverse this trend in 2025.
Additionally, the growing appetite for alternative investments, coupled with anticipated interest rate cuts in the US, could pave the way for the establishment of new crypto and blockchain enterprises in the upcoming year.
The Australian regulatory landscape also saw activity in the crypto sector, with ASIC proposing a comprehensive financial licensing framework for most crypto firms in the country. AUSTRAC, Australia’s national financial intelligence agency, announced plans to focus on regulating the cryptocurrency industry in 2025, particularly targeting crypto ATMs as potential avenues for money laundering.
Despite the challenges faced by the blockchain and crypto industries in Australia, the future seems promising with evolving regulations and shifting market dynamics. Stay tuned for more updates and insights on the ever-changing landscape of fintech.
