The latest report from KPMG reveals Australia's plan to shut down its fintech and cryptocurrency sectors by 2024. It further outlines the need for a comprehensive regulatory framework for cryptocurrency businesses and warns of the potential consequences of a shutdown.
Plans to Dissolve Australian Fintech and Crypto Sector
According to a recent report unveiled by KPMG, one of the Big Four accounting organizations globally, Australia is planning an exit strategy for its fintech and cryptocurrency sectors by 2024. This move is proposed due to the ongoing challenges affecting these sectors, including regulatory uncertainties and the lack of a comprehensive governance framework.
Need for a Regulatory Framework
The KPMG report underscores the necessity for a robust regulatory framework to govern cryptocurrency transactions and fintech businesses in Australia. At present, there is uncertainty over the legal status of cryptocurrencies, which is causing confusion and making it difficult for businesses to operate. A clear regulatory structure would not only provide legal security for businesses but also help maintain financial stability and ensure consumer protection.
Risks Involved in the Shutdown
The report also warns about the severe risks involved in shutting down the fintech and cryptocurrency sectors. KPMG argues that the exit would jeopardize Australia’s economic competitiveness. It might also discourage international investment into the country, affecting its growth prospects.
Impact on Cryptocurrency Businesses
If the proposed plan is executed, it will have a significant impact on cryptocurrency businesses in Australia. Many of these businesses are startups that have not yet achieved profitability. They rely heavily on investments and favorable regulatory conditions to continue their operations. A shutdown in the sectors could lead to a mass exit of these businesses, resulting in considerable loss of capital and jobs.
Proposed Way Forward
While the report paints a grim picture for the fintech and cryptocurrency sectors in Australia, it also proposes a potential way forward. KPMG suggests a transition plan that involves gradual shutdown of parts of the sectors while ensuring that critical aspects can continue to operate. This will minimize the adverse effects of the shutdown and allow time for businesses to adjust to the new regulatory environment.
Global Impact
The proposed shutdown of Australia’s fintech and cryptocurrency sectors may also have implications globally. Many international businesses operate in these sectors in Australia. Hence, a shutdown could send a negative signal about the viability of fintech and crypto businesses, potentially affecting the industry’s growth worldwide.
Conclusion
Australia’s proposed shutdown of its fintech and cryptocurrency sectors brings to light the need for a consolidated regulatory framework governing these sectors. While the move has raised concerns among businesses, it also reinforces the global need for clearer regulations in the cryptocurrency market to ensure its sustainable growth.
