Starbucks has finally jumped on the cryptocurrency bandwagon to make it easier for customers to pay for their coffees using bitcoin and other digital currencies.
Starbucks Goes Crypto
The famous coffeehouse chain has partnered up with Microsoft, Intercontinental Exchange and BCG to create a new digital currency platform called Bakkt which allows institutions and consumers to store their cryptocurrencies and use them to buy goods and services.
The exchange platform will convert bitcoin and other digital coins into U.S. dollars whenever you order strawberry lemonade, caramel Frappuccino, latte macchiato or any other item from your nearest Starbucks store.
The company’s partnerships and payments VP, Maria Smith hinted towards the new venture in a statement saying that Starbucks wants to develop a new payment method for its customers which will allow them to convert their digital assets into fiat money through a trusted and regulated platform.
Starbucks has already proven its commitment towards new and innovative payment options with the introduction of Mobile Pay for more than 15 million Reward members.
Starbucks and Microsoft may become the first big companies to accept crypto payment but others like Expedia, CheapAir and Shopify are also working on using bitcoin and other digital currencies as a form of payment.
Making Bitcoin Mainstream
The crypto industry has faced major setbacks over the past 12 months and most skeptics argue that its volatile nature makes it unfit to be considered as a mainstream currency.
Bitcoin has lost more than 50 per cent of its value this year with values changing by hundreds of dollars within a single day. Only this weekend, the digital coin plummeted below $7,000 before press time, losing almost $500 in value within 24 hours.
But with companies like Starbucks and Microsoft becoming more serious about cryptocurrencies, the crypto industry could finally break through to become a mainstream payment method in the retail sector. The move could also help stabilize its prices which have fluctuated heavily since late 2017.
BKCM CEO, Brian Kelly says that Starbuck’s decision is huge news for cryptocurrencies which have managed to make a mark in the stock market but still aren’t used commercially for buying and selling of goods and services. But once more and more companies start accepting digital coins as a legitimate currency, people will be more inclined to buy them.
Kelly says that Starbucks has taken a step in the right direction by partnering up with a regulated and trusted institution like ICE to smooth out the process of integrating crypto into its payment system.
After Bitcoin’s astronomical surge in 2017, many startups have popped up with the intention of integrating cryptocurrencies into global commerce but very few of them have succeeded in providing viable payment and exchange solutions for merchants and retailers. Now, ICE wants to change that with its new cryptocurrency payment and exchange platform.
The CEO of Bakkt, Kelly Loeffler, says that the service will connect consumers and merchants who wish to participate in digital currency transactions by providing greater security, efficiency and utility than any other trading or exchange platform.
In its effort to make cryptocurrencies more mainstream, ICE is planning to introduce single-day futures contract by the end of 2018 which will give owners bitcoins instead of cash when their contract expires.
This physical delivery feature could set ICE apart from other competitors like Cboe Global Markets Inc. and CME Group Inc. Since ICE is a highly regulated institution, it will help gain the trust of big players in the finance industry who are skeptical of cryptocurrencies due to their unregulated and volatile nature.
According to ICE’s statement, a number of investors including Microsoft, Fortress Investment Group, Horizons Ventures, Pantera Capital, Susquehanna International Group, Protocol Ventures, Alan Howard, Galaxy Digital and Eagle Seven will back Bakkt’s efforts in making cryptocurrencies payments more efficient and commonplace in the retail sector.
Megalodon Capital says that considering the fact that cryptocurrencies are here to stay, it makes sense for ICE, as an exchange platform to integrate it into their services. But the question still stands: Is the market ready to accept it?