Have any spare Bitcoin lying around? Later this year, you may be able to convert it to U.S. dollars to buy a grande Frappuccino. As the following CNBC report describes, Starbucks is partnering with Microsoft and the Intercontinental Exchange to create a new company, Bakkt, which will enable bitcoin payment exchange at the coffee café chain.
Starbucks is jumping on the cryptocurrency bandwagon. The Seattle-based coffee giant is working with Microsoft and a leading global exchange on a new cryptocurrency that will allow consumers to use Bitcoin to buy Frappuccinos.
Starbucks along with Intercontinental Exchange, Microsoft and BCG, among others, is working to launch a new company called Bakkt that will enable consumers and institutions to buy, sell, store and spend cryptocurrencies on the global network by November.
“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,” Maria Smith, vice president of partnerships and payments for Starbucks, said in a statement. “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.”
Cryptocurrency skeptics have challenged its use case as a means of payment because of its volatility. Bitcoin for example, has dropped by roughly 50 percent this year, and its value often changes by hundreds of dollars in a single day.
Starbucks taking cryptocurrency seriously could help Bitcoin breakthrough as a mainstream currency. It could also be bullish for prices, which have struggled to find footing since the end of 2017.
Who would have predicted this—Bitcoin as part of the payment process at Starbucks? But upon further thought, why not? Starbucks has never been a retailer to stand pat, but is often at the forefront of emerging retail commerce, such as mobile order and pay, integrated mobile apps, and so on. Like Amazon and Walmart, Starbucks has the scale, resources, and digital chops to attempt something like this. Whether this launches cryptocurrency into the mainstream remains to be seen. But if coffee lovers start to dabble in bitcoin mining, then we’ll know Starbucks in on to something.
Overview by Raymond Pucci, Associate Director, Research Services at Mercator Advisory Group