More than 7% of fintech companies headquartered in Australia closed down in 2024, with the blockchain and cryptocurrency markets suffering the heaviest losses, according to a research report by KPMG on the country's fintech landscape.
The total number of independent fintech companies in Australia has decreased over the past two years, from 800 companies in 2022 to 767 active companies across all business areas as of December 9, according to the 2024 KPMG Australian Fintech Landscape report.
Companies from the blockchain and cryptocurrency sectors accounted for 14% of the 60 Australian fintech companies that closed down in 2024. The report states:
"The blockchain and cryptocurrency sector is the hardest hit in the Australian fintech landscape, declining 14% year-on-year, with 74 active companies as of 2024."
Australian cryptocurrency companies suffered the biggest losses in 2024
According to KPMG, around 4.5% of the 60 companies have ceased operations, while 3% have closed due to mergers and acquisitions (M&A). Most M&A deals were driven by strategic demand, as buyers sought to enhance specific capabilities.
2024 Australian fintech snapshot. Source: KPMG
The KPMG report also suggests that the decline in blockchain and cryptocurrency companies is due to a shift in focus towards artificial intelligence. However, recent pro-cryptocurrency events, such as the approval of a Bitcoin (BTC) spot exchange-traded fund in the United States, could reverse this trend in 2025, KPMG noted.
Increasing interest in alternative investments supported by upcoming interest rate cuts in the coming months could drive the establishment of new cryptocurrency and blockchain companies in the year ahead.
Bringing cryptocurrencies under strict scrutiny
On December 4, the Australian Securities and Investments Commission (ASIC) issued a consultation paper proposing a comprehensive financial licensing regime for most cryptocurrency companies in Australia.
Source: ASIC
Two days later, on December 6, Australia's national financial intelligence agency - the Australian Transaction Reports and Analysis Centre (AUSTRAC) - revealed plans to focus on the cryptocurrency industry in 2025. AUSTRAC CEO Brendan Thomas said cryptocurrency ATMs are attractive targets for money laundering:
"This is the first step in AUSTRAC's focus on reducing the use of cryptocurrency for criminal purposes in Australia. We will be targeting this industry throughout the coming year."
Cryptocurrency ATM operators in Australia are now required to register with AUSTRAC, conduct transaction monitoring, and perform Know Your Customer (KYC) checks on users.
