Slowing Down Global Investment in Cryptocurrency and Blockchain: Insights from KPMG’s Financial Technology Pulse Report

02/16/2023 11:31 • Tech Ticker • 167 views

It is reported that according to KPMG’s Financial Technology Pulse Report in the second half of 2022, although cryptocurrency or blockchain is the primary area of Singapore’s financial technology investment in 2022, this area is slowing down globally. In Singapore, the funds related to cryptocurrencies decreased by 21% from US $1.5 billion in 2021 to US $1.2 billion in 2022. Globally, investment in this field has dropped from US $30 billion in 2021 to US $23.1 billion in 2022. KPMG predicts that by 2023, the investment in companies focusing on cryptocurrency may remain very slow, and the investment may shift to jurisdictions with a stronger regulatory framework for cryptocurrency activities.

KPMG: Despite the global economic slowdown, cryptocurrency is still the primary area of financial technology investment in Singapore in 2022

Interpret the above information:

KPMG’s Financial Technology Pulse Report highlights a significant shift in the investment trend in the second half of 2022. The report reveals that although cryptocurrency and blockchain have been the primary areas of fintech investment in Singapore, this trend is slowing down globally. Unlike in previous years, where the investment in this sector experienced significant growth, the investment in cryptocurrency and related funds decreased by 21% from US $1.5 billion in 2021 to US $1.2 billion in 2022. Similarly, at the global level, the investment in this sector has dropped from US $30 billion in 2021 to US $23.1 billion in 2022.

The report predicts that the investment in companies focusing on cryptocurrency may remain slow in 2023. It also indicates that investors may shift their focus to jurisdictions with a stronger regulatory framework for cryptocurrency activities. In recent years, many countries have enacted regulations aimed at safeguarding investors and curbing cryptocurrency scams. For instance, China recently intensified its crackdown on cryptocurrency activities, resulting in a drop in the investment in this sector.

The slowdown in cryptocurrency investment can be attributed to several factors. For example, the high volatility and unpredictability of the cryptocurrency market make it an unsuitable investment option for some investors. Additionally, the lack of proper regulatory frameworks and oversight means that there is a high risk of fraud and money laundering in the cryptocurrency sector. The report suggests that the adoption of better regulatory frameworks that can address these challenges may encourage more investors to venture into the sector.

In conclusion, KPMG’s Financial Technology Pulse Report provides insights into the slowing down of global investment in the cryptocurrency and blockchain sector. While Singapore has been a hub for cryptocurrency investment in recent years, the trend is slowing down globally. The report highlights the need for stronger regulatory frameworks to encourage investment in the cryptocurrency sector.

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