A lack of cooperation among regulators and blockchain companies threatens to undermine innovation in Kenya, according to IT Africa.
The central bank contends that bitcoin is an unregulated currency and has warned locals against engaging in cryptocurrency. The announcement has adversely affected BitPesa, one of Kenya’s largest bitcoin platforms.
The central bank issued a statement discouraging bitcoin’s use in Kenya, CCN.com reported in May.
BitPesa has operated in Kenya for two years and recently expanded to Nigeria. It attempted to integrate with M-Pesa, a mobile payment service, only to have Safaricom, the nation’s dominant telecom service, block the move.
BitPesa founder Elizabeth Rossiello said the company was able to expand in Nigeria more easily than in Kenya. Because of this, Kenya is no longer its biggest market, she noted during a presentation at the Blockchain Workshop by the Coalition of Automated Legal Applications, held recently in Nairobi.
BitPesa continues to work with Kenya’s central bank, according to Fred Fedynyshyn, BitPesa’s chief legal and compliance officer. He compared it to not having to fully understand how a combustion engine works in order to regulate the taxi industry. The central bank did not require each employee to understand how SMS messaging networks work before allowing M-Pesa to begin operating.
Regulators could work with innovators to see how the technology applies in order to create legislation or engagement rules, Fedynyshyn said. He said it is better to “work backwards” on how consumers use the product and how it deploys in society. He said such an approach is easier and more straightforward for creating regulations.
Fedynyshyn said BitPesa has seen varying levels of bureaucracy and interest in all the countries it has operated in. A regulator can’t understand how the technology is going to be used if they are not willing to listen, despite how selfish or uninterested the regulator may or may not be.
BitPesa will continue to work with regulators in markets they are in and push the cryptocurrency user as part of larger blockchain deployments.
CCN.com reported earlier this year that BitPesa and M-Pesa were suing Safaricom. Safaricom had stopped Lipisha, the payment gateway for both BitPesa and M-Pesa, from processing M-Pesa transactions and later restored it as long as M-Pesa ended its relationship with BitPesa.
Safaricom claimed BitPesa did not meet anti-money laundering requirements, a claim BitPesa denied.
Image from Shutterstock.
Last modified: July 13, 2020 3:13 AM UTC