Bitcoin Blazes New Trail in Emerging Markets
Thursday, February 12, 2015
While the tech world is busy speculating about bitcoin’s volatile value, cryptocurrency is making arguably its biggest impact in countries where the current price of 1 bitcoin exceeds the average salary earned in a week.
Kenya, Uruguay and Panama are just a few of the countries playing host to a growing group of venture-backed bitcoin companies that are using blockchain technology to tackle regional payments challenges.
Although the focus on emerging markets is a recent trend, cryptocurrency has been a global phenomenon from the beginning. While the majority (and largest) of rounds to date have been raised by U.S. companies, over 40 percent of the total venture investments tracked by CrunchBase in the past three years have gone into bitcoin startups based outside of the U.S.
“One of the reasons I’m excited about bitcoin and blockchain is really the potential in emerging markets, where there are so many underbanked and the financial infrastructure is not as developed,” says Jalak Jobanputra, founding partner of Future Perfect Ventures. “As people become more connected with smartphones, they’re able to do transactions on these devices versus the brick-and-mortar infrastructure we have here in the U.S. — and blockchain just enables that to happen in a more efficient way,” Jobanputra says.
Jobanputra’s latest bitcoin bet, BitPesa, is an East African remittance platform based in Kenya.
Yes, Kenya — the world leader in digital and mobile money. “Over 75 percent of the adults in Kenya use a digital currency called M-Pesa, and over half of the GDP of the entire economy is operated over this digital currency,” says Dan Morehead. Morehead’s bitcoin-focused fund, Pantera Capital, led yesterday’s $1.1 million round for BitPesa.