Kenya-based crypto payments platform, Kotani Pay, has successfully closed a pre-seed funding round, raising $2 million for its expansion plans. The round was led by San Francisco-based P1 Ventures, with participation from notable investors such as DCG/Luno and Flori Ventures. Kotani Pay’s primary objective is to broaden its presence in new markets, including Nigeria, Rwanda, Senegal, and Ivory Coast.
The core mission of Kotani Pay is to simplify cross-border remittances within Africa by harnessing blockchain technology. This innovative approach enables members of the diaspora to send funds to their loved ones in Africa through stablecoins, which are cryptocurrencies pegged to fiat currencies like the United States Dollar (USD). By adopting stablecoins, users benefit from reduced transaction fees and expedited settlement times.
Kotani Pay primarily targets the business-to-business (B2B) sector, integrating the smart contracts of crypto platforms with mobile money application programming interfaces (APIs). Notable partners include Yellowcard, DCG, Fonbank, Celo’s Valora, Mercy Corps, UNICEF Crypto Innovation Fund, and Stellar.
Additionally, Kotani Pay offers a business-oriented solution for converting local currencies into USD, with potential plans to extend this service to individuals. Beyond expanding its market presence, the company has exciting product launches on the horizon, including Reconset and Money Ledger.
One unique feature of Kotani Pay is its ability to facilitate the transfer of digital assets to mobile money wallets using feature phones, thanks to Unstructured Supplementary Service Data (USSD). This functionality ensures that even individuals in areas with limited internet access can participate in transactions.
Cross-border remittances are crucial to many African economies, yet they are plagued by issues such as high transfer fees. Kotani Pay’s fee-free transactions contribute to addressing the long-standing problem of financial inclusion in the region.
Despite the growth of fintech services and increased internet and mobile phone penetration, millions of Africans still lack access to basic financial services due to trust issues, high costs, and limited physical access to banks, among other barriers.
Kotani Pay Expresses Confidence in the Evolving Crypto Regulatory Landscape
Kotani Pay remains confident about the regulatory landscape for crypto in Africa. CEO Felix Macharia noted that the company works closely with local mobile money operators and regulated partners to ensure compliance with central bank regulations.
Central banks are increasingly engaged in these discussions, with some exploring the development of Central Bank Digital Currencies (CBDCs).
While regulatory scrutiny has recently intensified on crypto exchanges, Macharia remains hopeful about the evolving regulatory environment in Africa.
Positive developments include the introduction of Virtual Asset Service Provider Licenses in countries like Botswana, Mauritius, and South Africa, as well as EU regulations like MiCa, which address stablecoin issuers and exchanges.
Follow techkudi.com for more juicy content