Written and Filmed by: Tomer Kantor
 
In the last while, Bitcoin and Kenya, have been making the headlines (again), in Western media.
First, it was Bitpesa, a Bitcoin digital exchange platform that got blocked by Safaricom. The reason Safaricom and their product Mpesa is so important to Bitpesa (or any other competitor trying to enter the Kenyan Mobile Money market), is that they control a massive percentage of the market. According to most Kenyans, they are the market. Mpesa is a life saving product in Kenya. It gives people the ability to move money remotely, which means, no need to take a 12 hours bus ride to buy a sack of beans. Mpesa literary helps saving lives in field hospitals all year around!

 
After the Safaricom blockade, Bitpesa took the legal route, but the Kenyan court ruled that Safaricom can suspend their services to Bitpesa. Safaricom’s argument was, a warning document related to bitcoin, from the Kenyan Central Bank.

@pesa_africa @pelleb The story of Bitcoin is first, middle and last always a story of competition.

— Ian Grigg (@iang_fc) January 9, 2016

We’ve been here before with Kipochi, the (Bitcoin) SMS to Mpesa digital wallet, who got shut down by Safaricom in 2013. After all, Bitcoin can be seen as direct competition for Mpesa, Kenya’s digital favourite method of payment and store of value. It’s not only in Kenya that Bitcoin challenges power structures.

JP Morgan’s Jamie Dimon: Bitcoin Will “Try to Eat Our Lunch” https://t.co/Qt6LK6EI8V — the game is on — Tuur Demeester (@TuurDemeester) October 12, 2014

A week went by and Motherboard Magazine released a relatively accurate article about Bitcoin in Kenya, being a Western myth, but with great potential for future growth. The writer, JP Lawrence even linked to my documentary from 2014, which had a similar conclusion.
 

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By publishing this piece, Motherboard, had actually closed a circle. I’ll explain:

A Third Of Kenyans Now Have Access To Bitcoin, by Daniel Stuckey (This article has now been edited), was a 2013 piece which had real competitive implications. Stuckey’s piece told the Vice readers about Kipochi’s service.  Pelle Braendgaard, the founder and Kipochi’s man in Kenya, told me, while shooting my Bitcoin In Kenya documentary, that he has reasons to believe that the inaccurate and misleading article by Motherboard, is the reason Kipochi got shut down by Safaricom.

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After the recent article about the Western Myth of Bitcoin in Kenya, a testimony by Pelle was released on his private blog. At this point I could not stop myself from making public some previously unreleased footage of Pelle, talking about Safaricom, Motherboard and Bitcoin in Kenya.

 
Moving forward:
Recently, Bitpesa announced a new collaboration with Baharti’s Airtel. Airtel is another Mobile Money provider in Kenya, but it’s ten times smaller than Mpesa (in rural/Savannah’s land this is extremely noticeable). Will Baharti, unlike Safaricom, look to Bitcoin as a complementary service, rather than subversive competition? More over, Safaricom, which is partly owned by the Kenyan state, has been sued before for anti-competitive behaviour by Airtel. While the new Bitcoin experiment could put Airtel ahead of the Mpesa competition, only adoption will tell how Safaricom’s legal department will act. The challenge is hard, Mpesa has become so deeply embedded in Kenyan culture that; ‘Mpesa me some money’, has become a verb in Kenyan lingo. Much like; ‘just Google it’, has penetrated most Western languages.

 
When exploring the case studies of remittance companies entering Kenya, one must not be naive to think that the VC money is largely used to integrate with the so called ‘unbanked’. It may be the branded poster, but in a technocratic, solutionist start-up life, a company needs to be able to disrupt and scale.  The US and UK are the two countries with most Kenyan workers and residents, with numbers around 250,000 people (combined). So how does Kenya have an over USD 1Billion remittance market, when the average Kenyan worker sends home roughly USD100 per month? If we cut the remittance cost, do we actually help ‘unbanked’ Kenyan workers send money home cheaper? Well, yes, potentially, but the business model is to disrupt the expat market, where the real money is at. This is why losing the connection with Safaricom isn’t the end for Bitpesa. The real difference in access to physical exchanges between Mpesa and Airtel is felt in rural ‘unbanked’ Kenya, not so much in cities.

 
After the Kenyan Central Bank released the Bitcoin warning, a Kenyan initiative lead by John Karanja; to educate and inform about Bitcoin, started out of Nairobi. While very small in scale, the guys are trying to reach out to key players and decision makers in Kenya. I believe that this is an instrumental anecdote that is crucial to a future symbolic turn. Ian Grigg, who also has personal experience of bringing technology into East Africa:

 
tl;dr/w
Mobile money transformed Kenya. Rural Kenyans prefer to pay more, but have Mpesa’s convenience (Mobile Money competitors are cheaper). Fees could reduce drastically, if Bitcoin is used. Safaricom sees Bitcoin as competition, but competition is good for the poor end user. Western news about Kenya can be misleading. Foreigners starting a business in East Africa tend to have a better chance of success if their model is not solely based on the local market.