KPMG: Australia’s blockchain industry shrinks by 14% amid shift to AI

Australia’s blockchain industry dropped 14% this year, but changes in ETF regulations and lower interest rates could still help spark a recovery, analysts say. The Australian fintech landscape has seen a drastic decline as the number of active blockchain firms in 2024 shrinks by over 10% compared to 2023. According to KPMG’s “Australian Fintech Landscape 2024” report , the blockchain sector was among the hardest hit, falling 14% year-on-year. The number of firms in the sector now stands at 74, down from 85 last year. Nonetheless, the country’s blockchain and crypto sector remains home to big players, including Independent Reserve, SwyftX and CoinSpot, KPMG notes. However, the downturn isn’t limited to Australia. On the global stage, the focus has shifted from blockchain technology to artificial intelligence, with investors increasingly directing capital into artificial intelligence to modernize and future-proof their businesses. You might also like: Australia’s ASIC seeks stricter oversight of stablecoins, wrapped tokens There is still hope, though, that the SEC’s approval of Bitcoin exchange-traded funds in the U.S. could serve “as the positive catalyst the blockchain space needs.” KPMG notes that recent rate cuts in multiple regions could “free up capital that has been sitting on the sideline and which could potentially be deployed back in the sector, as the risk-free rate falls making alternative investments more attractive.” In terms of the biggest decline, neobanks took the hardest hit, with a 17% drop. KPMG notes that investor sentiment remains cautious, with venture capitalists still wary of investing not only in fintech but across the broader financial services sector. Read more: Australia targets non-compliant crypto ATM operators with new task force