Pelle Braendgaard, co-founder of the Kipochi Bitcoin wallet and transfer service, believes the controversial digital currency could act as a facilitator between mobile money platforms.
Speaking at AfricaCom 2013 in Cape Town today (Tuesday), Braendgaard said Bitcoin’s true potential was in disrupting the international remittance system.
HumanIPO reported in July Kipochi had launched the first Bitcoin-to-M-Pesa transfer service, however just two weeks later Safaricom pulled the plug on the agreement. HumanIPO understands it came under pressure from majority stakeholder Vodafone.
Despite the setback, Braendgaard still believes this model can be replicated across Africa and help its transfer network with the rest of the world. He has since held discussions with other network operators and banks interesting in working with Kipochi.
“A Kenyan in Britain can exchange money into Bitcoin using an exchange and transfer it via Kipochi to his cousin in Nairobi who can receive it via SMS and pick it up through M-Pesa,” said Braendgaard.
“The great thing about this is Bitcoin doesn’t care about borders so that is not a problem.”
Bitcoin is often described as a borderless currency and is not regulated by any government or central bank.
Braendgaard believes mobile money is ripe for the picking for Bitcoin exchanges and wallets because mobile money platforms and networks currently operate as “islands”.
HumanIPO reported last month cross border mobile money remittance is expected to surpass US$10 billion for the first time in 2013, though the total international remittance market is worth around US$500 billion a year.
“Most mobile money systems today are what I consider to be islands,” Braendgaard said. “They are tiny ecosystems operating within one geographical location and most of the time on one operator.
“Very few mobile money systems become very successful because they have to become the biggest islands and for an effective payment solution to occur it needs to be accessible to everyone.
“Bitcoin solves that because it is very easy to go in and create links and by doing that it starts to connect a critical mass.”
He said Kipochi is already in discussion with various mobile networks across the continent to find ways to integrate because it recognises there are revenue streams from Bitcoin they can take advantage of.
Braendgaard was quick to dismiss the usual security concerns surrounding Bitcoin and gave an optimistic view of its future.
“All the bad stuff I hear about Bitcoin now is what I heard about the web in 1995. Internet protocol is taking over the world now and I think the same thing is going to happen with Bitcoin.”