Starbucks partners with NYSE owner on bitcoin startup
- Starbucks partnered with Intercontinental Exchange (ICE), owner of the New York Stock Exchange, on a bitcoin startup that will provide a platform that lets customers buy, sell, store and spend digital currencies, according to a statement.
- Bakkt, pronounced "backed," will announce more details in the coming weeks and is also working with Microsoft and Boston Consulting Group to create the platform. Kelly Loeffler, who was ICE's head of communications until leaving the company in March, will lead the startup.
- "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 of partnerships and payments for the coffee company. The chain has 15 million members of its Starbucks Rewards program who make payments with their mobile devices.
Starbucks is an ideal partner for ICE as the exchange operator seeks to build an electronic platform that lets customers transact with digital currencies. While it's not clear if or when Starbucks will start accepting bitcoin as part of its involvement with Bakkt, the coffee chain's early adoption of mobile payments likely will make customers more comfortable transacting with digital currencies.
Digital currencies have gotten a lot of attention in the past couple of years for the dramatic rise in value of cryptocurrencies like bitcoin. While bitcoin can be bought, sold and stored in digital wallets, it hasn't yet been widely adopted for day-to-day transactions. Providers of digital wallets like Coinbase, which has more than 20 million accounts, have helped to popularize digital currencies among consumers, though they're still now widely accepted for purchases. One of biggest challenges is the volatility of cryptocurrencies, with bitcoin's value often fluctuating more than $1,000 a day.
Cryptocurrencies are getting the attention of major financial institutions and transaction processors. Mastercard last month won a patent to protect a method that would manage "fractional reserves of blockchain currency," which may lead the way to letting consumers charge their purchases on credit cards using bitcoin.
Bitcoin's volatility this year led Stripe, an online payments startup, to end support for bitcoin because the time to complete transactions with the digital currency has increased, along with fees. Fees to process a regular bitcoin transaction can be "tens of U.S. dollars," making payments as expensive as bank wires. Stripe customers who accept bitcoin have seen their revenues from the cryptocurrency decline substantially, removing incentives to accept it. Stripe said it saw promise in proposals to speed up bitcoin transactions, such as the Bitcoin Lightning Network and OmiseGo for Ethereum.
- Intercontinental Exchange / Business Wire Intercontinental Exchange Announces Bakkt, a Global Platform and Ecosystem for Digital Assets
- TechCrunch Starbucks drops major hint at plans to accept Bitcoin