A preliminary ruling by Kenyan High Court shows that the process started by BitPesa against Safaricom is to continue. Kenyan Central Bank warns against bitcoin. However, the leader of BitPesa is optimistic.

Safaricom is not obliged to restore BitPesa’s access to its famous mobile money system, M-Pesa, before the end of the process. This is a part of the preliminary ruling by the High Court judge Joseph Onguto. It also declared that some aspects of BitPesa’s activity may be considered as “money remittance”, making their regulation necessary under Kenyan laws.

The process was started by BitPesa together with the payments intermediary company Lipisha against Safaricom for freezing their accounts on 12 November. According to Safaricom, BitPesa does not meet anti-money laundering requirements necessary for a remittance company and needs to get a licence from the Central Bank of Kenya before its access to M-Pesa would be restored.

Meanwhile, the Central Bank of Kenya issued a public notice warning about the dangers of “virtual currencies such as bitcoin.” The notice is published in daily newspapers as a paid advertisement, meaning that the Central Bank is eager to spend money on attracting people’s attention to the perils of bitcoin. It especially targets such services as remittances:

“Domestic and international money transfer services in Kenya are regulated by the Central Bank of Kenya Act and other legislation. In this regard, no entity is currently licensed to offer money remittance services and products in Kenya using virtual currency such as bitcoin.”

However, BitPesa looks optimistic. They expressed their satisfaction “with the High Court's ruling, which permits BitPesa to continue to fight Safaricom's wrongful and unlawful bullying.” In their eyes, “the Court has not dismissed BitPesa's case, but rather has ruled only that BitPesa is strong enough as a company that it does not require access to M-Pesa to survive during the course of the case.” The company announced its integration with Airtel Money, another Kenyan mobile money start-up, and declared it looks forward to “expand across Africa” and “being fully vindicated by the court proceedings.” According to a blog post by Elizabeth Rossiello, CEO of BitPesa, Safaricom tries to stop the innovation because it feels it will be pushed away by the tide of progress.

BitPesa (“pesa” means “money” in Swahili) is perhaps the most well-known African bitcoin start-up. It runs a bitcoin-powered remittance service instantly delivering money to African mobile phone accounts. Most customers of the company use its services for business needs such as salaries, suppliers or operations. Since September it also runs a 24/7 bitcoin trade platform.

Alexey Tereshchenko