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BitPesa Secures More Funding But Is Forced To Reduce Kenyan Service

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BitPesa Secures Funding

Nairobi-based bitcoin startup Bitpesa has secured follow up funding to its Series A round earlier this year. This new round of funding is led by venture capital firm Greycroft Partners, which has experience investing in tech startups such as Braintree and Venmo, provides BitPesa with a further cash injection.

Investors Attracted By Positive Growth

The new round of financing comes at a time the firm is experiencing steady growth in African markets. Bitpesa is currently handling monthly trade volumes of $10 million, up from $1 million in 2016, with a 25% increase every month for the last two years. The company’s model which uses the bitcoin blockchain to provide low-cost B2B payment processing for local and international markets led to its being named the best fintech solution in Africa at the AppsAfrica Awards 2016.

Bitpesa CEO, Elizabeth Rossiello commented in AppsAfrica: “We keep raising because we have grown above and beyond projections […] We have expanded across Africa and Europe, added a stellar roster of Fortune 100 companies as clients and are receiving growing support from regulators.”

BitPesa received an additional new investor Plug and Play, with existing shareholders also fronting extra capital. Investors from previous funding rounds include Draper Associates, Pantera Capital, Blockchain Capital and Digital Currency Group.

According to Greycroft founder Alan Patricof in a Disrupt Africa interview, the investment firm believes bitcoin has potential when it comes to remittances and payments in emerging markets, an area where BitPesa is well positioned.

Plug and Play vice president, Scott Robinson also added: “BitPesa promises to revolutionise the exchange and payment markets in Africa, disrupting monopoly incumbents and opening the fastest growing economies in the world to foreign companies. We’re very excited for the team’s vision and current execution which bolsters payment avenues throughout the region.”

BitPesa has now doubled its team to around 40 employees since last year and is exploring cross-border payments as a significant growth area for the future, particularly for its African clients.

Strategic Partnerships

BitPesa aims to transform the financial landscape in Africa through its peer-to-peer payment network and bitcoin exchange. One way is through identifying cutting edge partners who can assist the company in rolling out other B2B products such as trade financing and lending. Already, BitPesa is actively seeking banks and MNOs (Mobile Network Operators) in each region to partner with.

While many have been reluctant to work with bitcoin startups in the past, with the company becoming FCA approved in the UK and Japan allowing the use of bitcoin as a transactional currency, hopefully, local banks and MNOs will be more open to integrating bitcoin technology in their operations. The company is also proactively engaging with regulators in African markets that have banned

The company is also proactively engaging with regulators in African markets that have banned bitcoin like Kenya and Nigeria, to find a way to service SME’s and individual clients.

Effect of the Price Rally

The price of bitcoin has surged to all-time highs since the start of the year, coming amidst the August 1 Segwit infrastructure upgrade that resulted in a currency split, and formation of bitcoin cash. With another potential technical upgrade coming for bitcoin in November, Rossiello insists bitcoin will still be used on the platform due to it being more liquid than other digital currencies.

“The speed of bitcoin payments has increased and this move ensures that technology can continue to have an “industrial use,” underscoring how strongly people believe in it. We’re experiencing an exciting moment for the firm and for the industry.”

The company is also expanding its presence in Francophone Africa with an office in Senegal, and in Europe, due to the increased money transfer volumes between this markets. The additional capital together with the wealth of experience the investors bring to the company will be instrumental in making it a market leader in Africa’s payments space.

Retracing in Kenya Due to a Difficult Regulatory Environment

Despite the good news of high growth figures and increasing funding for what is widely considered Africa’s leading bitcoin startup, the company announced on September 1 that it is making changes to the services it offers to its Kenyan customers.

Citing the difficult regulatory environment in Kenya that prohibits bitcoin-related startups from opening or maintaining business bank accounts with local banks, which is hindering the firm from process payments in Kenyan Shillings, BitPesa has decided that the verification of new customers in Kenya will be paused and that the new minimum limit for transactions in Kenya will be $25,000.

This means that buying bitcoin in Kenya using BitPesa will unfortunately only be available for businesses and high net worth individuals who are already existing BitPesa customers.

Regardless of the difficulties in the startup’s “home country”, BitPesa is a great example of a resilient African bitcoin startup that is able to navigate the complexities of dealing in digital currency in different jurisdictions around the globe.

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Almost a Quarter of High-Tech Consumers in South Africa Now Own Cryptocurrency

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High-Tech Consumers in South Africa

A new study titled “Digital Lifestyle Measure report” conducted by MBIT found that 23 percent of high-tech consumers in South Africa own at least one cryptocurrency, with bitcoin being the most common holding. 

New Report Shows High-Tech Consumers Hold Crypto

In the”Digital Lifestyle Measure report” report, each level of tech consumer (high, medium, and low) was grouped according to DM segmentation. A high-tech consumer is identified and tagged as a “DLM5 consumer”, and for the low-tech consumers, a “DLM1 consumer” was used. 

To place each of the participants in the right groups, the survey made use of a question and answer (Q&A) method. Each person was categorised according to how well they were able to answer the provided questions. The questions mostly focused on their private digital lifestyle and technological gadgets they own and can operate well.

The result of this survey shows that only six percent of the low-tech consumers (DLM 1) own crypto, while 23 percent of high tech consumers own cryptocurrencies. The remaining percentage was then shared in the order: DLM 2: seven percent, DLM 3: twelve percent, and DLM 4: eight percent.

cryptoThe report also stated that of the DML5 population, about 42 perfect of them are of the notion that cryptocurrencies are here to stay. Same goes for 30 percent of the DLM 4 consumers group.

Conversely, 41 percent of the low-tech consumers (DLM1 consumers) did not know what cryptocurrencies are all about, according to IOL

From the DLM 3 consumer group, about 34 percent of them cannot say what the future looks like for cryptocurrencies but 26 percent of them claimed cryptocurrencies to be the “future of financial transacting.”

The report has further shown that high tech consumers who are continually paying for something electronically, are more likely to buy crypto in the long run.

Based on the google trends data, South Africa currently has the highest levels of interest in bitcoin across the world. Hence, it should come as no surprise that tech-savvy South Africans are the ones investing in digital currencies and tokens. 

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Ecobank Report: Most African Regulators Are Taking a “Wait and See” Approach to Cryptocurrency Regulation

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African Regulators

While there has been a substantial increase in the adoption of cryptocurrencies in Africa compared to three years ago, there has been minimal effort from African countries to try and regulate cryptocurrencies despite their increased use in various African nations according to a new report by Ecobank.

Ecobank tracked “the current state of cryptocurrency regulation in all markets in Sub-Saharan Africa” through the regulatory responses that have been issued by central banks or financial regulators. In the report, the pan-African bank found that most African regulators are taking a “wait and see” approach when it comes to cryptocurrency regulation.

The report stated: “Many African governments and regulators recognise both the risks and the potential positive impacts of cryptocurrencies, and some also appreciate the difference between cryptocurrencies and the underlying blockchain technology. But they have been reticent in authorising cryptocurrency transactions, and mostly remain apprehensive about the potential risks. African countries appear to be looking to their neighbours to regulate and innovate first, and learn from their mistakes, rather than being the first mover.”

The reported noted that the main reason why African governments were being skeptical about licensing the use of cryptocurrencies was their citizens getting overexposed to cryptocurrency investments and there being a future crash that would cause a ripple effect in the broader economy.

African Regulators’ Stance

African RegulatorsOut of the 39 jurisdictions surveyed, more than 21 countries in the region are yet to make a public declaration on the use of cryptocurrencies.

So far, there have been three countries that have taken a stance on cryptocurrency. Namibia tops the list having banned the commercial use of digital currencies. However, South Africa and Swaziland are the only two countries in Sub-Saharan Africa that have adopted “a generally favourable and permissive stance, but without full legality”.

The remaining countries fall somewhere in between and “refuse” to directly regulate cryptocurrencies claiming that bitcoin and other digital currencies “operate in the grey area between legality and illegality” and have issued warnings to their citizens and investors against using or investing in them. The bank also noted that conversations regarding the speculative nature and instability of cryptocurrency prices have overshadowed their benefits and the potential they bring.

The bank went ahead to note: “Unfortunately, the spectacular rise and fall in the traded value of cryptocurrencies has drowned out broader discussion on the potential benefits this new technology could bring. The transformational impact that could be delivered by tokenising products and services on the blockchain has been compared to that of the Internet. Crypto tokens and currencies could enable consumers to transact instantly, cross-border and for free, provide them with KYC-compliant digital IDs, and incentivise their behaviour and change the way they engage with governments & service providers.”

Ecobank will continue to track cryptocurrency regulation in Sub-Saharan Africa and provide regular updates that will reflect the regulation progress in the African nations.

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Paxful Continues #BuiltWithBitcoin Charitable Initiative in Africa with the Construction of a Second School

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#BuiltWithBitcoin

Peer-to-peer bitcoin exchange Paxful announced the newest chapter in its #BuiltWithBitcoin charitable initiative: the construction of a school in Rwanda – for students aged six to fifteen – in the Nyamata Sector of Rwanda’s Bugesera District. This will be the second bitcoin-funded school that Paxful has raised funds for.

bitcoinContinuing its partnership with NGO Zam Zam Water, Paxful has kickstarted the project with a $20,000 donation. The total construction cost of the school is estimated to be $100,000. The remaining balance, Paxful hopes, will be raised through its fundraising campaign.

Donations can be made via Bitcoin, Bitcoin Cash, Ethereum, Litecoin, and Dash.  Paxful will match all community donations until the $100,000 goal is met.

“The #BuiltWithBitcoin initiative is a testament to the power of cryptocurrency,” said Ray Youssef, CEO of Paxful. He added:

“We firmly believe that it can improve lives and make the world a better place.”

The planned school is expected to be almost twice the size of the first bitcoin-funded school and will serve up to 300 primary school students upon completion. Furthermore, the school will include a cafeteria, a 35,000-liter potable water well, solar panels for sustainability, and many other resources for the education and enjoyment of students, staff, and faculty, according to a company press release.

“Education is a crucial tool for helping those in developing nations increase their standard of living, so we are very pleased to partner with Paxful to serve these bright young students,” said Yusuf A. Nessary, founder and president of Zam Zam Water. He added:

“This is only a small glimpse into what we can and will continue to do with the power of cryptocurrency.”

Paxful began the #BuiltwithBitcoin initiative in 2017 to promote philanthropy and charity within the cryptocurrency industry. The company plans to construct 100 African schools, as well as donate money for wells and other projects.

To contribute to #BuiltwithBitcoin, send all donations to Zam Zam Water:

BTC (Bitcoin): 3Q5CESP85hhXTLSy2HDbSyNchb5Bi8D7ku
BCH (Bitcoin Cash): 15YGniLxo77kfMUWGoRNT6ShUQC93MvaXg

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