[UPDATED] Bakkt Digital Asset Platform: Starbucks Hopes You’ll Like Coffee With ICE

[UPDATED] Bakkt Digital Asset Platform: Starbucks Hopes You’ll Like Coffee With ICE

The parent company of the New York Stock Exchange has announced a partnership with Microsoft and Starbucks to create a “global ecosystem for digital assets.”

  • UPDATED | August 6, 2018:

    Some news outlets misinterpreted the Friday announcement, stating that the partnership between Starbucks and the Intercontinental Exchange meant that Starbucks would be accepting cryptocurrency as payment. To clear up this confusion, a spokesperson from Starbucks spoke with Motherboard, saying, “It is important to clarify that we are not accepting digital assets at Starbucks. Rather the exchange will convert digital assets like Bitcoin into US dollars, which can be used at Starbucks … However, we will continue to talk with customers and regulators as the space evolves.”

    ORIGINAL | August 3, 2018:

    The parent company of the NYSE, Intercontinental Exchange (ICE), has announced it is creating a new platform, called Bakkt, that, “intends to leverage Microsoft cloud solutions to create an open and regulated, global ecosystem for digital assets.”

    The announcement revealed that several companies are partnering with Bakkt, including Boston Consulting Group, Microsoft, and Starbucks. Starbucks, described as the project’s “flagship retailer,” also posted the same announcement of the project on its press page.

    In the release, Jeffrey Sprecher, the founder, chairman, and CEO of ICE, stated that Bakkt will bring “regulated, connected infrastructure together with institutional and consumer applications for digital assets … to build confidence in the asset class on a global scale.”

    As is often the case with these announcements, it’s difficult to tell exactly what will be done to accomplish this. Seemingly everything. It will be a “scalable on-ramp” to digital currency participation, it will “include federally regulated markets and warehousing along with merchant and consumer applications.”

    The release went on to state that as an initial feature:

    “Intercontinental Exchange’s U.S.-based futures exchange and clearing house plan to launch a 1-day physically delivered Bitcoin contract along with physical warehousing in November 2018, subject to CFTC review and approval. These regulated venues will establish new protocols for managing the specific security and settlement requirements of digital currencies. In addition, the clearing house plans to create a separate guarantee fund that will be funded by Bakkt.”

    Despite the opacity of the marketing jargon, one thing is clear: If the project is a success, the participation of Starbucks could provide a boost to cryptocurrency usage. If cryptocurrency is ever going to be widely adopted, it would need to be accepted by prominent retailers, and there are few retailers more prominent than Starbucks. It has more than 27,000 locations spread over every continent except Antarctica.

    The company’s former experimentation with novel payment methods also makes it a natural choice for the project.

    “As a leader in Mobile Pay to our more than 15 million Starbucks Rewards members, Starbucks is committed to innovation for expanding payment options for our customers,” said Maria Smith, vice president of partnerships and payments at Starbucks.

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