Kenya: Digital Currencies and Financial Inclusion: Revisited

Washington DC — When CGAP published its Brief on Bitcoin versus Electronic Money in January of this year, we concluded: “The current realities of Bitcoin mean it is still a long way off from reaching the unbanked.” It seemed that digital currencies such as Bitcoin were primarily the domain of consumers in developed countries who were tech-savvy and enjoyed playing around with the latest hot item. Yet demonstrating just how quickly things move in this space, just a few months later a start-up called BitPesa launched a service using Bitcoin to provide cheap and fast remittance services to Kenya. CGAP decided to provide support to BitPesa for market research of potential customers, so that CGAP could understand what potential digital currencies have for financial inclusion as well as to understand the practical and regulatory barriers facing a start-up wanting to link Bitcoin with the formal banking and mobile money infrastructure in an emerging market.

BitPesa, based in Nairobi, is initially focusing on providing remittance services for the UK to Kenya corridor and charges a variable rate of 3% on transfers. Here is how it works.

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