Starbucks joins bitcoin platform, but will it put crypto on the menu?
Perhaps seeking to dispel rumors that Starbucks can’t innovate in payments without Howard Schultz, the company is joining a platform that could one day enable customers to trade bitcoins for caramel lattes and mocha frappuccinos.
The Intercontinental Exchange, owner of the NYSE, announced plans on Friday to launch an open and regulated global ecosystem for digital assets, such as bitcoin, to be traded, warehoused and converted for commercial and consumer applications. Starbucks is perhaps the most notable among the primary launch partners that will create consumer applications to convert bitcoins to fiat currency.
The new global platform and ecosystem, named Bakkt, will leverage Microsoft cloud solutions to address the evolving marketplace needs for trading, warehousing and conversion of digital assets such as bitcoins.
But Starbucks' buy-in doesn't guarantee the company's full support of a technology. Back in 2012, Starbucks made a $25 million investment in the mobile card acceptance company Square and placed its CEO on Square's board. Starbucks began using Square to process its payments, but it never used Square's hardware. Starbucks left Square's board a year later, and in 2015, the two cut ties and Starbucks moved its processing to JPMorgan Chase.
Starbucks' relationship with Bakkt is very much in the early stages. Bakkt plans to launch a one-day physically delivered futures contract along with physical warehousing in November 2018, subject to CFTC review and approval.
“This work is in the beginning stages and no specific timetable is being shared," Josh King, vice president of communications for Intercontinental Exchange, stated by email. "Starbucks is working with Bakkt to develop practical, trusted and regulated applications for consumers to convert their digital assets into U.S. dollars for use at Starbucks.”
Indeed, Starbucks noted that this agreement is just a baby step for its support of bitcoin.
"It is important to note that we are not accepting digital assets at Starbucks, rather the exchange will convert digital assets like Bitcoin into U.S. dollars, which can be used at Starbucks," said Maggie Jantzen, Starbucks' manager of global communications, in an emailed statement. "We have no further detail to share at this time regarding accepting cryptocurrency as a form of payment."
Intercontinental Exchange wants to extend bitcoins into everyday life. In a recent interview with Fortune, executives discussed the lengths to which Bakkt is going to solve the technical issues of blockchain’s slow trading speed while operating a regulated exchange to make digital assets such as bitcoin more accessible to consumers. Working with companies such as Starbucks will go a long way to legitimizing bitcoin in the eyes of consumers, allowing it to reach into other areas such as 401(k)s, credit cards, and more.