The announcement earlier this month by BitPesa of a successful funding round to the tune of $ 1.1 million led by Pantera Capital that closed in November, brings into sharp focus the growth of alternative forms of what I call “value transports” that continue to ride on the greenfield opportunity that mobile and mobile money have opened up. While the global remittance business remains the low hanging fruit, with Africans in the diaspora sending home billions every year, the really big opportunities are yet to be unearthed and how the pioneer providers play the game will determine just how far and how fast the technology will be entrenched into current and emerging services.
BitCoin is perhaps the better known cryptocurrency with thousands of services built on top of it but there are over 500 heirs to the throne, with everyone pushing to be the entrenched and globally accepted leader. “There were more than 530 cryptocurrencies available for trade in online markets as of 5 January 2015 but only 10 of them had market capitalizations over $10 million” – Wikipedia
In a market where mobile money has crippled the business models of traditional financial service providers, forcing them to play ball, I half expect that the various institutions, from saaco’s to fully fledged banks would be looking into the cryptocurrency movement keenly. The sole intent of this focus would be to “panel beat” the technology giving it scalable local use cases; if but to ensure a fighting chance against mobile money that is controlled by mobile network operators who are cash rich and looking to diversify, as the telco space itself morphs.
Apart from the creators of the currencies, we see a growing number of ecosystem or channel innovators building the bridges that would ensure interoperability with “legacy” instruments at scale with a focus on open decentralized systems, multicurrency support and secure real-time transaction processing. This is where a number of well-known technology players seem to be placing their bets with strategic investments in companies that are trying to either build out such bridges or leveraging the most stable releases out there to address the not so obvious opportunities to be found in connecting to, storing, transiting and exchanging value.
Having made a clarion call for the local technology players to engage actively in lobbying, I am keen to see if this yet to be fully understood opportunity with be met head on by pushback from the August House or other regulator. Most players, probably as both a mitigation and preservation strategy are quickly setting shop in multiple countries. Play well and live long would be the single statement of advice, for now.