The CEO of Safaricom is afraid of sanctions from the Central Bank of Kenya if it gives BitPesa access to its services again.

Partnership with a bitcoin company could endanger M-Pesa, the famous system of mobile money run by Safaricom. That’s what Bob Collymore, the CEO of Safaricom, told in an interview to Business Daily Africa:

“We’re in a very precarious position as a successful mobile money transfer system. We cannot afford to compromise it (M-Pesa) or any other mobile money system and we have to work with CBK, which is clear in its regulations.”

All three users’ comments on Collymore’s interview were negative. The user Patriot told that Airtel Money has a good possibility to get an edge over M-Pesa. The user Lak Liech said: “There's so much illegal payment going on through Mpesa system that the holier than thou line propagated by Collymore is just nonsense.”

BitPesa believes that the absence of regulation does not mean that situation is unclear:

“CBK has currently chosen not to regulate bitcoin. Unregulated business is not illegal business and BitPesa will continue to operate and maintain our headquarters in Kenya. BitPesa is licensed, however, by the UK’s Financial Conduct Authority as an Authorised Payment Institution.”

While there have been no attempt to regulate bitcoin on the part of the Central Bank of Kenya, it has recently issued a public notice warning about the dangers of “virtual currencies such as bitcoin”, especially concerning remittances. According to Aly Satchu Khan, the CEO of Get Rich, a Nairobi-based financial company, the main threat comes from criminals and terrorists who could use virtual currency exactly because it is currently unregulated by the authorities and therefore offers a gap.

The main business of BitPesa is a bitcoin-powered remittance service delivering money to African countries with a flat rate of 3% on all transactions. According to the Overseas Development Institute, existing money transfer systems may charge up to 12% on remittances to Africa.

Most customers of BitPesa use its services for business needs such as salaries, suppliers or operations.

BitPesa started in Kenya in 2013 in partnership with Safaricom. The money transferred by BitPesa was sent directly on M-Pesa mobile phone accounts. However, on 12 November 2015 BitPesa’s access to M-Pesa was suspended. The company then took it to the court. A preliminary ruling by Judge Joseph Onguto gives reason to Safaricom, saying that the company is not obliged to restore BitPesa’s access. In response the bitcoin company entered into partnership with Safaricom’s rival, Airtel Money, but plans to continue the process hoping to be “fully vindicated by the court proceedings.”

Alexey Tereshchenko