Name: Balancing The Ledger: Why The World Needs Crypto
Uploaded: 2018-04-13
Duration: 8 min 33 s
Description: BitPesa CEO Elizabeth Rossiello joins Fortune’s Ledger team to talk crypto in Africa and TransferZero acquisition.

[ MUSIC ] Welcome to Balancing the Ledger, where we cover Fintech, Block Chain, Crypto Currency, and more. I'm Robert Hackett. I'm Jen Vischner. And today we're joined by Elizabeth Rosielo, CEO of bitPeso. Thanks for having me here, guys. Absolutely, thanks for coming on. I want to talk about bitPeso And your decision to go to Africa and to build a company there focused around cryptocurrencies, why did you move to that market? Obviously it's a very big diverse place lots of different cultures. But give us a taste for what's going on over there, what the scene is like .>> Sure. I think one of the distinguishing factors of our success and the story of Bitpesa is that we didn't hear about crypto and then come to the market. I have been living and working the region for six years across the continent in microfinance and mobile money. Which were the precursors to the first fintac movement. So for us, it was really an organic step. We were already working in financial services. We already understood how mobile money worked domestically. And what was that next iteration? How do we take the beauty of mobile money where you can transact Cashless society, domestically, and how we do make that across border and how do we make that more decentralized and how do we make that open source. And so we start [ INAUDIBLE ] the idea was to take the first inkling of technology that was happening in the Silicon Savannah in Nairobi, Kenya back in 2013 and connect it to the Crypto world. And that's how we got started. In Africa, are there reasons that make Africa particularly attractive for cryptocurrency? Yeah, of course. You know, the naysayers will say cryptocurrency is only for criminals and libertarians. We've heard those arguments. Or North Korea. But I was just telling this story to you guys behind in the green room, where I wanted to invest in a friend of our's public launch on the Toronto stock exchange, and I didn't have a live U. S. account because I've been living for ten years in sub- Saharan Africa, and I couldn't open a brokerage account quickly, because I didn't have a utility bill. So my physical presence in another region excluded me from engaging in investment security. And okay, that's a privileged person problem, But it just shows that I'm not necessarily a criminal, I'm not necessarily a bad actor, I just happen to be currently living in a geography where I'm not connected to that infrastructure. So think about all of the diverse amazing economies and people and businesspeople across the 54 countries of the African continent, and how they are routinely excluded in many ways from participating in global markets. So imagine if you just cut Hong Kong off from the rest of the world or cut off Tokyo. That's how a lot of businesses feel about living and working in Lagos, Nigeria. And you're not just in Africa either because you recently acquired a company in Spain, right? Yeah, so back in 2015 [ UNKNOWN ] made a strategic move to not just be in East Africa but to move over to West Africa and simultaneously the UK. At that time, we had hopes that the UK would be the hub of all cryptocurrencies. So in 2015, we went ahead and got licensed as an authorized payment institution by the Financial Conduct Authority and we were the first company in the world to get that licensed using BitCoin blockchain which ia exciting. There were other companies in the sandbox And then [ UNKNOWN ] info had the e money issuer license. A tiny little start up with like very little funding out of [ UNKNOWN ] was the first one to get that. So that was exciting. and that was really a first tow into the European market. And Europe and the UK are huge end point for the bridge to Africa. You have [ UNKNOWN ] but companies, donors, real estate. So much interaction between the two continents. It was a natural step for us. So, just this January we went ahead and made that toe into a full footprint by acquiring TransferZero, which is a Spanish Fintech, with a Bank of Spain license. So we're now licensed across Europe under the new payment regulation, which is really exciting. And for me, the story is African start- up [ UNKNOWN ] European start- up. And there are very few start- ups that start with an African team, based in an African office, where we're far away from sources of capital. We have a lot of the infrastructure problems that you face in emerging markets. And we not only expand across the continent But up into Europe. Recently, India and Pakistan, the central bank said that they were going to force banks to no longer with companies that are working on cryptocurrency, or have relationships with cryptocurrency companies. And we've seen other crack- downs. What is your sense about what's happening around the world? Is this also happening in Africa? Are we seeing the same kinds of things? Yes, so I mean, unfortunately, in an early sector, in an early frontier, I know a lot of people in this sector say this, we're at the very early stages. So there has to be a lot of education and not in like a pedantic way, like they must be educated to our values. But it's also just like a lot of understanding, what are the risks, how do they relate to this economy, how do we medicate those risks. And unfortunately, when there is other economic factors happening, sometimes the central banks make a quick move or place blame where it shouldn't be. But the positive news is we've seen a couple of these crackdowns reversed Right? We've definitely seen that happen in Japan, after Mt. Gox. They were like, what's gonna happen. And then last year, they came out with some beautiful regulation about that topic. They're at the forefront of regulation. Exactly, exactly, and they didn't have to do that. And in Kenya, ourselves, our home country where we started, where I lived for seven years We saw the Central Bank of Kenya do the same thing and say, wait a second, we're not sure what's happening. This company's getting pretty big, it's getting a lot of attention, we haven't had time to really assess this. So all banks stopped work with companies like this. And then just a month ago we saw the creation of a blockchain task force, and the government get very vocal about really wanting to reopen this. So it took two years but it happened, and the best news also is that in the South Africa, the South African Reserve Bank came up with a very detailed piece in March about the risks that this technology could post, the ways to mitigate the risk and the overall conclusion that there was no systemic risk on the country From crypto currency itself. So this is not something that's going to crash the economy, create a global crisis. Exactly. And you know, there are things to watch out for, but they're nothing that you can't kind of meet with, compliance, or normal AML, KYC, you know. For me it's always to be thorough, all of the knowledge we have about compliance and finance out the window because we have new technology Now we use what we have learned and best practice and we adapt that to new technologies as they arrive. So, the very vocal stance from the South African Reserve Bank was very encouraging and I think, we hope, everyone to see that India and Pakistan follow suit. They were mum for quite a while, the SARV in South Africa and I remember a few years ago Vinny Lingham. Civic was teasing me saying, they're never gonna say yes. And I was like, they will, have faith. And we had a bet over it. And so here we are in [ UNKNOWN ] And you won the bet. Well you have to be settled. But I mean it's 2018 before that happens, so I think we just need to be patient. Last year, you took in several million dollars from Greycroft, a very established VC firm. What are you doing with that money, how are you planning to use it? yeah for us we've only ever raised just under $ 10 million total, and that's a tonne for an African based startup, a few years ago there were only a handful of African startups that had raised that much, for us it was all about continhuig on the mission So, increasing our infrastructure and by infrastructure I mean bank accounts, as you can see in India and Pakistan are so essential. Regulations, so relationships with Central Banks. Which means helping them write new legislation, or showing them how we can be compliant under existing legislation. Connecting to last mile providers, whether that's credit cards, or Mobile money providers. And just kind of expanding both east and west across the continent and down south. So what's exciting for us now is that we are launching in South Africa soon. And then doing our first location off the African and European continent and launching in the Middle East in the Emirates. And you've mostly been transacting BitCoin and that's the big [ UNKNOWN ] in this cryptocurrency space. But are there other cryptocurrencies that you're eyeing or have used? Yeah. Of course, I mean BitCoin for us is always been the most liquid, the most popular. But there's such a interest from our African traders for getting into other coins and BitCoin of course is the middle curreny for a lot of that But then right up there is Either. So we hope by the fall to launch Ether trading. And then I've said it before, if it's liquid and our customers want it, we'll launch it. That's all we have time for. Thank you so much for joining us, Elizabeth. Thanks for having me. I'm Robert Hacket. I'm Jen [ UNKNOWN ]. Go to fortune. com for more Balancing the Ledger. See you next time. [ MUSIC ]

BitPesa CEO Elizabeth Rossiello joins Fortune’s Ledger team to talk crypto in Africa and TransferZero acquisition.