Bitcoin trading firm partners with Airtel after cutting Safaricom links
CBK recently warned that holders of the bitcoin currency did not have any legal recourse if they lost their money. PHOTO | FILE
What you need to know:
BitPesa is offering bitcoin payment and trading services in four African countries including Kenya (through Airtel), in Uganda (Airtel and MTN), Tanzania (Airtel and M-Pesa) and Nigeria through Quickteller and Paga.
Nairobi-based bitcoin trading platform BitPesa has partnered with Airtel to offer bitcoin payments and trading services in the country, barely three months after Safaricom terminated M-Pesa links to the firm.
BitPesa indicates on its website that it is offering bitcoin payment and trading services in four African countries including Kenya (through Airtel), in Uganda (Airtel and MTN), Tanzania (Airtel and M-Pesa) and Nigeria through Quickteller and Paga.
It is not clear whether the deal with Airtel was signed with its Indian parent group or with the Kenya office.
The Business Daily could not establish the nature of the partnership between BitPesa and Airtel, with Elizabeth Rossiello, chief executive of the bitcoin trading platform, saying she could not comment on the matter at this point.
“I will comment soon in more depth,” said Ms Rossieello.
Airtel did not also respond to our queries by the time of going to press.
The partnership with Airtel money comes as a relief to Kenyan users who were left without a platform after Safaricom demanded that its customer, Lipisha Consortium, cuts M-Pesa links that it was providing for BitPesa.
Before BitPesa’s connection with Lipisha was severed, users could convert bitcoin into Kenya shillings and use the digital currency to make retail payments or remittances via M-Pesa.
The fallout between Safaricom and Bitpesa came on the backdrop of the Central Bank of Kenya’s (CBK) recent advisory against dealing in digital currencies such as bitcoin.
CBK warned that holders of the bitcoin currency did not have any legal recourse if they lost their money.
Although the CBK advisory did not outlaw the use of digital currencies, the warning handed Safaricom grounds to severe contracts with providers that linked its M-Pesa platform to the currencies.
Safaricom CEO Bob Collymore told the Business Daily in an earlier interview that the firm will not agree to have bitcoin-related transactions on its M-Pesa system unless the virtual currency is authorised by the banking sector regulator.
“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,” said Mr Collymore.
CBK in its warning had indicated that such currencies could be used by criminals in money laundering.
“Risks such as “being untraceable and anonymous,” make them (bitcoins) susceptible to abuse by criminals in money laundering and financing of terrorism.
“Consumers may also lose their money without having any legal redress in the event that these exchanges collapse or close business,” CBK warned in mid-December.
BitPesa, however, insists that its virtual currency business is “safe and sound”.
“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,” said the firm in a notice.
The cryptic currency is not backed by any central bank or assets in the world and its value fluctuates wildly depending on demand and supply by online traders.
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