Australia’s fintech and cryptocurrency sectors are facing a challenging future, with KPMG forecasting an increase in company shutdowns and market exits by 2024. The consultancy’s Nov. 21 report cites tightening regulatory pressures, limited access to capital, and declining investor confidence as key factors behind the projected downturn.
The report highlights a sharp decline in venture funding for fintech and crypto startups, with 2023 seeing a 40% drop compared to the previous year. This funding squeeze, coupled with a regulatory environment that has become more stringent following high-profile collapses, is leaving many companies unable to sustain operations or secure growth opportunities.
KPMG’s findings suggest that smaller players in the sector are most at risk, particularly those unable to meet the evolving compliance requirements set by Australian regulators. Meanwhile, larger firms with established operations are pivoting toward consolidation and cost-cutting measures to weather the storm. The report underscores the importance of innovation and adaptability for firms navigating this turbulent period.
Despite the challenges, experts note that the industry’s long-term outlook remains promising, driven by Australia’s commitment to digital finance innovation and blockchain adoption. However, KPMG warns that a more stable regulatory framework and renewed investor confidence are crucial for the ecosystem’s recovery and future growth.
