Starbucks prepares for a Bitcoin future
Starbucks is not jumping on the cryptocurrency bandwagon, not just yet. Reports last week that Starbucks is ready to begin accepting Bitcoin and other cryptocurrencies as payment for drink and food orders at its locations were a tad premature.
Instead, Starbucks announced it is working with the Intercontinental Exchange (ICE), Microsoft and others to create Bakkt, a platform with a mission to enable “consumers and institutions to buy, sell, store and spend digital assets on a seamless global network,” in the future.
The Bakkt platform will initially be used for trading and converting Bitcoin into traditional forms of currency that businesses such as Starbucks accept as payment. The network is currently prepping for its launch, with further details expected in the weeks to come.
“Bakkt is designed to serve as a scalable on-ramp for institutional, merchant and consumer participation in digital assets by promoting greater efficiency, security and utility,” said Kelly Loeffler, CEO of Bakkt, in a statement.
“Starbucks will play a pivotal role in developing practical, trusted and regulated applications for consumers to convert their digital assets into U.S. dollars for use at Starbucks,” said Maria Smith, vice president, partnerships and payments for Starbucks. “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.”
The creation of Bakkt offers the promise of cryptocurrencies such as Bitcoin going mainstream. Retailers, for the most part, have been slow to jump on the cryptocurrency bandwagon. Overstock.com, which has been accepting cryptocurrency as payment going back to 2014, has been the most notable exception in this area.
CNBC reports that adoption of cryptocurrency has been slow, in part, because of the volatility in prices. Bitcoin has dropped in value by half this year and changes in the hundreds of dollars in a single day are not unusual.
“Starbucks is seeing some kind of demand for acceptance of crypto and Bitcoin, and to tie up with a huge regulated institution like the ICE is really positive for the space,” Brian Kelly, CEO of BKCM, told CNBC.
- Intercontinetal Exchange Announces Bakkt, a Global Platform and Ecosystem for Digital Assets – Starbucks
- Starbucks Clarifies ‘Coffee for Bitcoin’ Media Reports – CCN
- New Starbucks partnership with Microsoft allows customers to pay for Frappuccinos with bitcoin – CNBC
- Overstock CEO bullish on bitcoin sales – RetailWire
DISCUSSION QUESTIONS: Do you see Bitcoin and other cryptocurrencies becoming widely used in the consumer marketplace over the next decade? How likely are other retailers to follow Starbucks’ lead?