30s Summary

Australia’s financial technology sector saw more than 7% of companies close in 2024, particularly affecting blockchain and cryptocurrency firms, a KPMG study found. Out of 60 fintech firms that were shut down, 14% were from this industry, leaving only 74 active blockchain and crypto businesses. The closure reasons ranged from ceasing operations to mergers and acquisitions. Despite this, approvals of Bitcoin exchange-traded funds in the US and the rise in alternative investments may bolster the sector in 2025. However, tighter regulations from Australian financial authorities could pose further challenges.

Full Article

Recently, a study by KPMG showed that in 2024, just over 7% of Australia’s financial technology (or fintech) companies had to close up shop. The report noticed the businesses most affected were those in the blockchain and cryptocurrency industry.

For the last two years, the total number of independent Aussie fintech outfits has been dropping. By December 9, 2024, there were just 767 such companies across all types of businesses, down from 800 in 2022, according to KPMG’s Australia Fintech Landscape 2024 report.

About 14% of the 60 Aussie fintech firms that had to close were working with blockchain and crypto. This industry was the hardest hit, remarking a 14% decrease with only 74 active firms left by 2024.

KPMG noted that of these 60 firms that were shut down, about 4.5% ceased operations while another 3% had to close because of mergers and acquisitions (M&A). These M&A deals were mainly fueled by businesses trying to enhance specific skills or expand capabilities.

Surprisingly, the growing interest in artificial intelligence could be one of the reasons for the decline in blockchain and crypto businesses. However, KPMG also highlights some positive news – recent pro-crypto developments, such as the approval of spot Bitcoin exchange-traded funds in the US, may reverse this downward trend in 2025. A growing interest in alternative investments, supported by US rate cuts, might also help set up new blockchain and crypto firms in the future.

But, it’s not all smooth sailing for crypto firms in Australia. In 2024, the Australian Securities and Investment Commission (ASIC) raised a proposal suggesting a blanket financial licensing process for most of the country’s crypto organizatiuons. A couple of days later, the Australian Transaction Reports and Analysis Centre (AUSTRAC), also agented that there will be more focus on the cryptocurrency industry in 2025.

AUSTRAC has commented that cryptos are an appealing means of money laundering activity. Crypto ATM operators in Australia are already required to register with AUSTRAC, monitor transactions, and implement customer identity checks.