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Fintech sector faces 7% decline as blockchain firms drop 14%

Fintech sector faces 7% decline as blockchain firms drop 14%

GrafaGrafa2024/12/09 13:00
By:Mahathir Bayena

A recent KPMG report indicates a significant contraction in the Australian fintech sector, with over 7% of companies shutting down in 2024. 

The report highlights that the total number of active fintech firms has decreased from 800 in 2022 to 767 as of December 9, 2024. 

Among these closures, blockchain and cryptocurrency firms were particularly affected, accounting for 14% of the 60 fintech companies that ceased operations this year. 

KPMG noted that the blockchain and cryptocurrency sector has seen a year-over-year decline of 14%, leaving only 74 active firms in this space. 

The report attributes part of this downturn to a shift in interest towards artificial intelligence technologies. 

Despite the challenges, there are indications that the market could rebound in 2025, especially following recent pro-crypto developments, such as the approval of spot Bitcoin exchange-traded funds in the United States

KPMG suggests that upcoming rate cuts may also stimulate new investments in crypto and blockchain ventures next year.

In addition to market trends, regulatory changes are on the horizon. On December 4, the Australian Securities and Investment Commission (ASIC) released a consultation paper proposing a comprehensive financial licensing regime for most crypto firms operating in Australia

Two days later, the Australian Transaction Reports and Analysis Centre (AUSTRAC) announced plans to intensify its focus on the cryptocurrency sector in 2025. 

“This is the first step in AUSTRAC’s focus to reduce the criminal use of cryptocurrency in Australia,” AUSTRAC CEO Brendan Thomas stated.

He emphasised that crypto ATM operators must already comply with registration and transaction monitoring requirements, including Know Your Customer (KYC) checks. 

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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