NYSE owner Intercontinental Exchange (ICE), tech giant Microsoft, and Starbucks have partnered to launch a new company, dubbed Bakkt, that will look to develop an open, regulated, and global ecosystem for digital assets.
The new venture will leverage Microsoft's cloud solutions to enable consumers to buy, sell, store, and spend cryptocurrencies on a global network. Investors in Bakkt include ICE, Microsoft's VC arm M12, Galaxy Digital, Horizons Ventures, and Pantera Capital. Bakkt is in the process of obtaining regulatory approvals and will likely launch in November.
- Bakkt plans to roll out physical Bitcoin futures contracts. It wants to launch physical one-day Bitcoin futures contracts along with a warehouse, which are yet to be approved by the Commodity Futures Trading Commission (CFTC). When the contracts expire, customers will receive Bitcoin, as opposed to cash. This is fairly unusual — the futures offered by CME Group and Cboe are both settled in cash, for example.
- Starbucks wants to help make crypto transactions more usable. Starbucks is aiming to expand available payment options for its customers with this new venture. Specifically, it plans to enable consumers to convert their cryptocurrencies into US dollars to use for Starbucks purchases.
Working with a large merchant like Starbucks may help to boost crypto adoption — but not for a while.Starbucks allowed customers in Hong Kong to pay for coffee using Bitcoin in 2015, and this new project is more evidence that it wants to make this payment option easier for customers. Additionally, converting cryptos into fiat money before a transaction will likely ensure that Starbucks doesn't have to deal with the volatility of cryptocurrencies.
However, only 23% of customers would use cryptos for buying a cup of coffee, according to data from ING, which might make it difficult for Starbucks to get customers to adopt the new payment method initially. As such, while this could certainly encourage adoption, it will likely be some time before we see consumers using cryptos widely for everyday purchases, as that will require a broad change in mindset.
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NYSE owner Intercontinental Exchange (ICE), tech giant […]