Regulatory landscape in sub-Saharan Africa

BitPesa

Wholesale FX for African currencies using Bitcoin infrastructure for immediate settlement

Cheaper. Faster. Easier.

Largest bitcoin broker in East, Central and West Africa

USD

AUD

BRL

CNYEUR

NGNKES

XOF

ZAR

CAF

GBP

TZS

AED

BTC

Cayman Islands BitPesa Ltd Kenya Tanzania,Uganda, Nigeria, DRC, SenegalBTC Africa TopCo

6 local BTC Africa Trading SubsidiariesB Services Europe Ltd UK Trading entity

B Transfer Services LtdUK licensed MSB as Authorized Payment Institution

Corp Structure

Footprint

=

FT Team

Markets

Users

Offices

Q4 Q1 Q2 Q3 Q4 Q1

6 7 9 14 17 25

1 2 3 3 4 5

Kenya Kenya KenyaTanzania

Kenya Tanzania Nigeria

KenyaTanzania Nigeria Uganda

KenyaTanzania Nigeria Uganda

DRCSenegal

312 1000 2500 3100 4300 5300

2015 20162014

Money Transfer Business (aka MSB, MTO, MRB)

Foreign Exchange Bureau

Regulatory Categories

E-Money Issuer

Payment Institution

Commodity Broker

Required by US for bitcoin wallets, exchanges, brokers

Required by UK if fiat-fiat transfers are involved

Money Transfer Business (aka MSB, MTO, MRB)

Foreign Exchange Bureau

Regulatory Categories

E-Money Issuer

Payment Institution

Commodity Broker

Money transfer = Currency transferBitcoin is not “currency” because no country

recognises it as legal tender

Some brokers don’t issue bitcoin or store it centrally

Brokers deliver via other payments processors and do not directly interact with customer accounts

Bitcoin is intangible and has no inherent value

Foreign Exchange = Exchange of legal tender

What happens when different regulators view your business model differently?

What happens when stakeholders (telcos, banks) don’t accept a regulator’s decision?

50 Shades of Gray

How do international authorities influence SSA regulators?

Often requires bank or telco sponsorship

Can take between 6-48 months

The Letter of No Objection

Not necessarily recognized by all stakeholders

Flow: Treasury Trades

BTCUSD KESUSD BTC BTC

US BANK

LICENSEDBROKERDEALER

BITPESA

ACHbitcoin

transactionKES

KENYANBANK

RTGSTransfer

BUSINESS SENDER BUSINESS RECIPIENT

FX in AfricaWidest FX spreads

in the worldNo investment in product innovation

Inefficient banks with low-capacity treasury teams

Fragmented settlement ecosystem

Low liquidity

Unreliable last-mile settlement

Easy, CompliantResponsive

High Cost

Low Cost

DifficultRisky

Independent brokers

Bank TreasuryDesks

Competitive Landscape

WesternUnion

BankTransfer

4-9 days 1-2 days

9% Cost 7% Cost

mobile money, cashbank

Instant

1-3% Cost

Transparent

Mobile MoneyBank

often blocked or returned

inconvenient pick-up

PayPal

7-9 days

9% Cost

need USD bank account

only available in a few countries

BitPesa

Asante!