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Kipochi Launches Bitcoin Wallet with M-Pesa Integration in KenyaKipochi Launches Bitcoin Wallet with M-Pesa Integration in Kenya

On July 9, 2013, a tiny in-house demo that was never meant for the public leaked to the global press within days. Two weeks later, a telecom giant in London quietly ordered it killed.

M-Pesa's DominanceM-Pesa's Dominance

M-Pesa was already the most successful mobile money system on earth. Roughly 70 percent of Kenya's adult population used it, and it accounted for close to a third of the country's entire GDP. Any Bitcoin service in Kenya had to reckon with M-Pesa first.

Pelle Braendgaard, co-founder of a small wallet startup called Kipochi, moved from Nicaragua to Kenya in May 2013 to build the integration himself. Within a month he had what he called a "ghetto integration" working, limited to a handful of in-house staff. The goal was modest: show Kenya's Central Bank and local telecoms what was technically possible, nothing more. Kipochi had not launched the M-Pesa feature to the public and had no plans to yet.

The LeakThe Leak

It leaked anyway. Global outlets picked up the story instantly, and coverage spiraled into claims that a third of Kenyans already had a Bitcoin wallet, a wide exaggeration of a demo built for a handful of staff, as CoinDesk reported that week.

What Kipochi had actually built was still notable. Its wallet ran on SMS, USSD and HTML5, meaning it worked on basic feature phones, not just smartphones, a serious design choice in a country where most people did not carry the latest handset.

The ShutdownThe Shutdown

Within a week or two of the press explosion, Kipochi's connection to M-Pesa through merchant gateway Kopo Kopo was cut off without warning. It took Braendgaard more than a week just to learn Safaricom had ordered the shutdown.

The order had not come from Kenya. Braendgaard later said sources inside Safaricom told him the instruction came from Vodafone headquarters in London, spooked by the same exaggerated press coverage that had just made Kipochi briefly famous.

The IronyThe Irony

Kenya's Central Bank was the calm party in this story. In August 2013 it quietly told Braendgaard it had no objection to Kipochi continuing, as long as it partnered with a regulated institution. The telecom giant, not the regulator, pulled the plug.

Kipochi struggled on for roughly another year before closing its Kenya operations. Braendgaard eventually founded Notabene, a company that helps crypto businesses comply with financial regulation, the very force that had ended his first Bitcoin venture.

Part of an ongoing series on Bitcoin history. This event falls on July 9, 2013.