30s Summary

Over 7% of Aussie fintech companies closed operations in 2024, with blockchain and crypto businesses being the hardest hit. A report by KPMG indicated that the total number of fintech firms dropped from 800 to 767, leading to a 14% decrease in active crypto and blockchain businesses, with many forced to shut down due to strategic mergers and acquisitions. The slump was attributed to surging interest in AI tech, while the approval of pro-crypto laws and US rate cuts could boost the sector in 2025. Stricter rules for crypto ATM operators are also expected.

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In 2024, over 7% of Australia’s fintech companies had to close down, according to a study by KPMG. The industries that got hit the hardest were blockchain and cryptocurrencies.

Having been on a downward trend for two years, the number of standalone fintech companies in Australia went down from 800 in 2022 to 767 across all sectors by December 9, as detailed in KPMG’s Australia Fintech Landscape 2024 report.

About 14% of the 60 Aussie fintech businesses that had to close shop in 2024 were from the blockchain and crypto space. Thus, the number of active companies in this area fell by 14% to 74.

Among the 60 businesses that had to cease operations in 2024, around 4.5% closed down completely while roughly 3% were forced to shut down due to mergers and buyouts. In most cases, these merger and acquisition deals occurred out of strategic necessity, with buyers looking to boost particular abilities.

This slump in blockchain and crypto firms might be due to the rising interest in AI tech. However, the recent passing of pro-crypto laws, like the approval of Bitcoin spot exchange-traded funds in the US, could potentially turn the tide in 2025, according to KPMG.

The growing interest in alternate investments, courtesy of forthcoming US rate cuts, may further small startups in the crypto and blockchain space in the near future.

On December 4, a briefing paper suggesting a blanket financial licensing system for most crypto firms in Australia was issued by the Australian Securities and Investment Commission. After that, on December 6, the Australian Transaction Reports and Analysis Centre revealed plans to pay special attention to the cryptocurrency industry in 2025. This could mean stricter compliance requirements for crypto ATM operators including mandatory registration, transaction monitoring and user identification checks.