4 key takeaways from KPMG Pulse of Fintech Report

Published at: Feb. 8, 2022

As Bitcoin (BTC) and altcoins took a break from reaching new all-time highs, the market sentiment seems gloomy since the start of 2022. However, while the market seems to be sleeping, its trajectory shows that there’s more to look forward to in the coming months.

Multinational professional services network KMPG published its biannual Pulse of Fintech report, where the firm tracks and analyzes developments and investments within the financial technology sector. The report highlighted the most notable developments in major regions like the Americas, Asia Pacific and EMEA, and pointed out the “surging interest” in crypto and blockchain in the past year.

While the scope of the report covers a broader context, crypto and blockchain remained as one of the key topics. Here are the main takeaways from the Pulse of Fintech report by KPMG.

Over $30 billion in investments entered crypto and blockchain

From the $5.5 billion amassed in 2020, investments in the crypto and blockchain space rose to more than $30.2 billion in 2021. This shows that more companies have recognized that crypto and its technologies have potential roles to play in modern financial systems.

Brian Heaver, KPMG US Managing Director thinks that 2021 is very significant for crypto when it comes to adoption.

“There’s an incredible number of companies trying to do a lot of things in the crypto and blockchain space right now — and while we don’t know where all their efforts are going to land, there’s a ton of curiosity and interest in the possibilities.”

Regtech focused on crypto despite the shift in Asia-Pacific

Despite the outright crypto ban in China, technologies that help regulate crypto have been “a relatively hot area of investment” according to KPMG. The firm predicts that there may be more investments to come in regulation technology (regtech) solutions focusing on cryptocurrencies in the future.

This may also make its way to Europe according to KPMG International’s Global Head of Regtech, Fabiano Gobbo.

“While the US continued to attract the vast majority of investments in regtech, Europe is well-positioned to see growth heading into 2022.”

Blockchain use cases are growing

In 2021, as investors started to become more familiar with blockchain, interest in its various use cases has also grown. According to KPMG, the "universe of blockchain applicability" has expanded in 2021. The year spurred more interest in a wide range of blockchain applications, including multi-jurisdictional blockchain uses cases for data, research and analysis.

Because of this, the firm also predicts that crypto will attract “investors of all types” including retail investors as well as corporate and institutional investors because of the increase in use cases.

Singapore-based crypto investments grew more than tenfold

As previously reported by Cointelegraph, crypto investments in Singapore grew very significantly in 2021. The global crypto hub recorded a whopping $1.48 billion in crypto-focused investments last year. This wildly surpasses its previous record in 2020 which was $110 million. The region’s crypto investments accounted for 5 percent of the total global investments in crypto in 2021. It also makes up a third of all investments in the fintech sector throughout the country.

KPMG Singapore’s Head of Financial Services Advisory Anton Ruddenklau thinks that Singapore attracted investors that were previously looking into China, but are pushed away because of the crypto bans.

“Singapore and India could be big winners on the investment front as investors and companies that might have gone to China look for opportunities elsewhere in the region.”