Emerging Regulatory Issues on Digital Currencies in Kenya

Digital currencies

 
A couple of days ago I perused the Kenyan NATIONAL PAYMENT SYSTEM ACT (No. 39 of 2011)THE NATIONAL PAYMENT SYSTEM REGULATIONS, 2014 (pdf). My interest was the legal stance on issuance of P2P exchangeable assets, such as loyalty reward points in Kenya, on the bitcoin blockchain – a decentralized network. At Umati Blockchain Ltd, we are exploring using the coloured coins protocol (for now)  for issuing freely exchangeable loyalty points, with all the ease, nifty features and security of the bitcoin blockchain.

It seems, to me, digital currencies such as bonga points, and cryptocurrencies such as bitcoin, fall in a gray area. They do not fit the strict definition of E-money under Kenyan law. Perhaps why, late last year, the Central bank of Kenya admitted via a public notice ‘Virtual currencies such as Bitcoin are forms of un-regulated digital currency not issued or guaranteed by any government or central bank.’ I subsequently wrote a rebuttal to this notice.

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My takeaways from E-payments panel at Connected 2016

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I was delighted to sit on an electronic payments and the future of cash panel at the connected 2016 conference. As co-founder and Chief Analyst at Umati Blockchain ltd., my invitation scope was Bitcoin, virtual currencies and the blockchain. It was great getting feedback from the audience, on what is wrong with Kenya’s cashless transition. A healthy nuance of talking points emerged from the mixed backgrounds of the panelists.

Here is a 30 min edited video of the panel session

These were my takeaways

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Why I am bullish on Bitcoin and why you should be too

Bitcoin is yet to resonate with mainstream investors and the average (wo)man as a neo-asset class. I think if you have heard about bitcoin, you would be foolish not to dip a toe. Bitcoin, is a great proxy investment at potentially, the greatest innovations of our age, the internet of money.

Bitcoin Price 2

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Uganda’s Mobile Money Censorship is a Testament to Bitcoin

Money as a form of Communication

The censorship of mobile money in Uganda during its Presidential and parliamentary elections, is a testament to the need for apolitical digital currencies like bitcoin. Money, just like media is a means of communication. Just as social media censorship riles up freedom activists, so should forms of censorship on money.

On election day, Ugandans woke up to no social media and no mobile money services. Nearly 20 million mobile money users were unable to access the service for at least two-and-half days.

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How Kenyan Banks are fighting off Mpesa

Once upon a time, Kenyan Banks lost to Mpesa. It’s been 7 years, and they have since made a number of strategic moves to win back the market

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Why we should Slay Mpesa, and save the town

article2Kenya and east africa’s mobile money systems are overly reliant on Telco’s networks and SIM modules. The status quo is detrimental to Banks, Non-banking financial institutions and a whole host of digital token value services e.g sports betting and prepaid electricity tokens.

Telcos, now Mobile Money Operators, are a Banks wet dream. Peer to peer money transfers in Kenya almost always route through a mobile network operator’s SMS, SIM card and USSD channels; they are the gatekeepers.
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Kenya clamps down on Cash

From my Twitter timeline, I can tell there is a lot written about the ongoing war on cash; an international war on physical paper and coins. Today, it was much closer to home.

Central Bank’s new tough rules to monitor large cash transactions was an article from the Standard Digital dated January 28, 2016 [Read more…]

Why Bitcoin Matters

Bitcoin article

Bitcoin, a little know currency that emerged in 2009, has achieved what was previously thought impossible, a digital cash. It went up from a market cap of under $1 million to today’s $6 billion. It also got Central banks excited by the concept of issuing virtual currencies, and a real shot  at eradicating cash. Never has the role of Bitcoin been more clear. In a world of state issued digital monies, a censorship resistance digital bearer asset is the only check against bad government. [Read more…]

The Curse of the Dollar, Why bitcoin matters for Africa

Commodity prices have dictated Africa’s fortunes for decades. Over the last 8 months, however, falling commodity prices have exposed the weakness of this model. I have always said, the peoples of Africa are best placed to benefit from an apolitical global currency like Bitcoin. [Read more…]

How much it costs to send money btwn Kenya & Tanzania via Mpesa

A couple of weeks ago Safaricom and Vodacom announced a cross border money transfer service on the Tanzania – Kenya corridor. Both subsidiaries of UK-based Vodafone Group, are leaders in their respective home markets. Through this partnership, registered Mpesa and Vodacom users can send and receive money in either direction.

With assistance from my friend (Ofio) in Tanzania’s capital, Dar, I set to out to test this service and found out:

It costs 6.24% in total to send 4,000 TZs to Kenya. A 4.74% forex margin spread is applied plus 1.5% sending charges . The same applies for TZ to Kenya bound transactions from Vodacom to Mpesa.

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