David Edwards
According to KPMG’s Australia Fintech environment 2024 analysis, 7% of the country’s fintech companies will shut down their operations in 2024, further diminishing the fintech environment in Australia. As of December 2024, there are only 767 active enterprises in the industry, down from 800 in 2022.
Cryptocurrency and blockchain companies were disproportionately impacted, making up 14% of this year’s 60 closures. According to KPMG, this segment has shrunk 14% year over year (YoY), leaving only 74 businesses operating.
Acquisitions, Strategic Consolidation, and Mergers
In 2024, mergers and acquisitions (M&A) accounted for 3% of fintech closures, while total shutdowns accounted for 4.5%. The majority of M&A activity was driven by strategic goals, with acquiring companies seeking to improve particular operational or technological capacities.
AI’s Effects and Recovery Prospects
According to KPMG’s analysis, there is a growing trend of investors showing interest in artificial intelligence (AI), which could have played a role in the demise of blockchain and cryptocurrency companies. However, a resurgence of cryptocurrency-focused companies in 2025 may be facilitated by the United States’ acceptance of Bitcoin spot exchange-traded funds (ETFs) and projected interest rate reductions in the country.
Regulatory Demands and Difficulties with Compliance
Increased regulatory scrutiny is another issue facing the Australian bitcoin industry. The Australian Securities and Investment Commission (ASIC) put up a comprehensive financial licensing framework for cryptocurrency companies on December 4. The Australian Transaction Reports and Analysis Centre (AUSTRAC) declared two days later that it would further up its monitoring of the cryptocurrency sector in 2025.
Brendan Thomas, the CEO of AUSTRAC, raised concerns about the improper use of cryptocurrency ATMs for money laundering and emphasized the agency’s determination to stop illegal behavior in this area. Crypto ATM operators in Australia are already required to monitor transactions and use Know Your Customer (KYC) procedures.
Towards the Future: A Year of Change?
Notwithstanding failures, KPMG predicts that next year could see a rise in blockchain and cryptocurrency firms due to interest in alternative investments and advantageous macroeconomic conditions. Resilience in the sector will probably depend on how well it handles regulatory obstacles and takes use of new opportunities in international markets
