Australian fintech industry experienced a notable contraction in 2024, with more than 7% of fintech companies shutting down, according to KPMG’s Australia Fintech Landscape 2024 report. Blockchain and cryptocurrency firms bore the brunt of the decline.
KPMG reported that the number of independent fintech firms in Australia has steadily declined over the past two years, dropping from 800 in 2022 to 767 by December 2024. Of the 60 companies that ceased operations in 2024, 14% were from the blockchain and cryptocurrency sector, making it the most affected vertical.
“The blockchain and cryptocurrencies space was the hardest hit in the Australian fintech landscape, decreasing by 14% YoY with 74 active firms as of 2024,”
the report read.
The report highlighted two primary factors behind the closures. Approximately 4.5% of firms ceased operations entirely, while 3% exited the market through mergers and acquisitions (M&A). Strategic consolidation, aimed at enhancing operational capabilities, drove most M&A activity.
KPMG also linked the downturn in blockchain and crypto firms to a growing focus on artificial intelligence, which has been reshaping investment priorities. However, the firm suggested that recent positive developments in the cryptocurrency market—such as the approval of spot Bitcoin ETFs in the United States, could pave the way for a resurgence in 2025.
Additionally, anticipated interest rate cuts in the U.S. and a rising appetite for alternative investments could fuel the establishment of new crypto and blockchain ventures in the year ahead.
Meanwhile, this revelation comes as Australian regulators are preparing to introduce new legislation that will require cryptocurrency exchanges to obtain financial services licenses. Alan Kirkland, a commissioner at the Australian Securities and Investments Commission (ASIC), emphasized that these measures are necessary because the regulator considers major cryptocurrencies like Bitcoin and Ether to fall under the Corporations Act. ASIC has already opened a public consultation on the new rules, and it projects that the updated guidance is expected within the next two months.
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