Bitcoin to Fuel Africa’s Banking Revolution


The Conversation (Melbourne)

Bitcoin has landed in Kenya.

The online currency that was, until recently, the preserve of tech entrepreneurs and only the most pioneering financiers, is to go mainstream in Nairobi while the rest of us continue to look on gingerly
from the sidelines.

This is thanks to Kipochi a Bitcoin wallet that will enable users to transfer bitcoins to each other before converting them into local currency. Kipochi – Swahili for “wallet” – will allow Kenyans to send money
quickly and cheaply, effectively avoiding the high transaction fees charged by existing services such as moneygram. Enabling the transfer of funds between countries is significant given the huge importance of
remittances to Africa’s economy. Remittances from outside Africa dwarf Western aid, for example, and the growth of economic migration across African borders means that transactions are increasingly international.


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Mobile phone banking is already flourishing in Africa much more quickly than here in the UK. It is driven by widespread mobile phone use and the relative scarcity of banks. The numbers are illuminating. In Kenya, the heartland of M-Pesa – the world’s leading mobile money service, approximately 70% of adults do not have access to a formal bank account. At the same time around 70% do have access to a mobile phone, and the overwhelming majority of those with phones have used them to access M-Pesa to transfer money.

M-Pesa, M for mobile and Pesa – Swahili for money – is one of the relatively rare examples of “technological catch-up”, where the rapid adoption of a new technology allows less developed parts of the world to make substantial strides forward.

M-Pesa is very straightforward. Once one has registered an account and deposited some money, one simply dispatches cash to the intended recipient via a text message. The recipient then converts the text
message into cash at one of the 40,000 agents dotted around the country. The service is a godsend in many ways, it avoids lengthy bank queues, it negates the rigmarole of setting up a formal bank account and it facilities the support of the many rural-urban households that stretch across the country in an effort to secure a livelihood.

The Conversation (Melbourne)