Australian Fintech Landscape 2024: Blockchain and Crypto Face Decline Amid AI Surge

Australian Fintech Landscape 2024: Blockchain and Crypto Face Decline Amid AI Surge

The fintech sector in Australia has witnessed a significant shift in 2024, with blockchain and cryptocurrency firms experiencing a 14% decline in activity. A report by KPMG highlights the contraction of the sector as attention pivots globally toward AI-driven innovation.

Blockchain and Crypto Sector Shrinks

The number of active blockchain and cryptocurrency firms in Australia fell from 85 to 74, marking a 14% year-over-year drop—the steepest decline among fintech subsectors. Despite the contraction, key players like Independent Reserve, Swyftx, and Coinspot continue to anchor the industry.

This decline reflects subdued mergers and acquisitions (M&A) and investment activity in 2024. According to the report, deal flow and capital allocation in fintech were primarily focused on capability-building, with larger deals dominating the M&A landscape.

Why the Blockchain Sector Declined

KPMG attributes the downturn in blockchain and crypto activity to a global shift in investment priorities. In 2024, attention veered from blockchain technology to artificial intelligence (AI), as businesses sought to integrate AI capabilities for future readiness.

However, the report notes a potential turning point for the blockchain sector:

“The SEC’s approval of the Bitcoin ETF could act as a positive catalyst, reinvigorating the blockchain space despite previous adverse events.”

Additionally, potential rate cuts by central banks may release capital, which could be redirected toward blockchain and crypto projects in the coming years.

Australia’s Fintech Leaders: Payments and Regtech

While blockchain and crypto faced headwinds, other fintech subsectors in Australia showed resilience and growth:

• Payments Subsector: With over 150 active firms, the payments sector is Australia’s most mature fintech domain. It attracted significant local and international investments in 2024, signaling robust confidence in its growth potential. However, the industry anticipates new regulations to establish a clear operational framework.
• Regtech Growth: Regtech emerged as a strong contender, driven by rising demand for compliance and risk management solutions. Complex regulatory environments and evolving reporting requirements are expected to sustain investor interest in this space.

Outlook for Australian Fintech

As blockchain and cryptocurrency sectors regroup amid shifting global priorities, Australia’s fintech landscape is diversifying. The growing focus on AI and regtech, coupled with regulatory advancements, positions the country for a transformative period in financial technology.