March 6, 2019, | AtoZ Markets - Starbucks is reportedly partnering with the U.S. cryptocurrency platform Bakkt.
Bakkt history in brief
In 2018 different news portals suggested that cryptocurrency platform Bakkt could be the venture that will transform Bitcoin or any other cryptocurrency into full-fledged money. Despite that fact, Jeff Sprecher’s announcement of his new cryptocurrency venture, the subsidiary of the Intercontinental Exchange, went virtually unnoticed by the crypto hyped world. A year ago, when asked about Bakkt potential in the market Kelly Loeffler, the company’s CEO asnwered :
“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."
Bakkt plans to collaborate with global merchants
In the beginning, the Bakkt founders claimed that the company could feature Bitcoin to fiat conversions drawing a feature that is rare on cryptocurrency exchanges. In total, Bakkt was expected to serve a digital marketplace that moves $270 billion per year, as the Intercontinental Exchange subsidiary officials revealed. One of the local news portals called Bakkt a “transformative gambit” that could change the entire payment system, especially if such huge global merchants, like Microsoft or Starbucks, would agree to collaborate. Seem like the media predicted the company’s future.
Bakkt and Starbucks relationship in history
It is worth noting, that the rumors about Bakkt and the Seatle-based global coffee company circulated since summer 2018. However, at that time the coffee house chain giant's management denied that they would accept cryptocurrency directly, but would allow users to transfer Bitcoins to fiat via a dedicated app. Also, it is worth to mention, that Starbucks became one of the original partners that launched Bakkt project in August 2018. Bakkt and Starbucks partnership was first announced in the same period. The vice president of partnerships and payments at Starbucks, Maria Smith, said then:
“As the flagship retailer, Starbucks will play a pivotal role in developing practical, trusted and regulated applications for consumers to convert their digital assets into US dollars for use at 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.”
A month later Bakkt announced its platform’s first offering will take the form of physical Bitcoin futures. In January 2019, the crypto platform announced completing the first round of fundraising with a result of $ 182.5 million. The new date for two companies initiative was reported to be January 24th due to pending approval from the local regulators.
Bakkt and Starbucks will benefit from the new deal
The new crypto platform and the coffee giant plan will give Starbucks customers a way to convert crypto to US dollars to make purchases. If the project succeeds, Starbucks has a chance to become the first merchant based on Bakkt platform. The parties are said to cooperate on mutually beneficial conditions. The coffeehouse chain giant may start accepting Bitcoin for coffee right after a sizeable equity deal between Bakkt and Starbucks.
Starbucks first giant merchant to support Bakkt
Now Starbucks will support the Bakkt software to let US clients purchase their products with cryptocurrencies and all digital coins will be “transformed” in fiat money. Starbucks will accept cryptocurrency payments in an indirect way, benefitting from a large pool of users and getting fiat payments. Seems the company is making strategic steps towards growing its customer base using Bakkt in this case for “a different type” of payment.