It is only recently that cryptocurrency has entered into mainstream thought. One major recent development in bringing cryptocurrency to the mainstream is Starbucks’ new deal with Microsoft and the Intercontinental Exchange (ICE) to launch a new platform that will allow bitcoin and other cryptocurrencies to be used in transactions at Starbucks. The three companies are working to launch a new company called Bakkt, which will enable consumers and institutions to buy, sell, store, and spend cryptocurrencies on the global network by November.
Bakkt CEO Kelly Loeffler said that “we are collaborating to build an open platform that helps unlock the transformative potential of digital assets across global markets and commerce.” The development is groundbreaking enough for ICE founder and chief executive Jeff Sprecher to claim that Bitcoin “has the potential to become the first worldwide currency.”
Caveat Emptor: Paying with Bitcoin?
It is important to note that purchasing at Starbucks directly with cryptocurrencies is not possible, nor will it be even with the aforementioned partnership. Cryptocurrency has to be converted into a national fiat currency (e.g.: dollars, pounds, euros, yen, etc) in order to be used for purchase. The cryptocurrency platform will help customers swap their cryptocurrency to US dollars at the current rate before spending it at its outlets.
While the CNBC article does clarify that Bakkt’s platform can convert bitcoin and other cryptocurrencies into US dollars that can be used to buy a Cold Foam Cascara Cold Brew, Matcha Lemonade, or anything else at Starbucks, the headline “New Starbucks partnership with Microsoft allows customers to pay for Frappuccinos with Bitcoin” might have misleading implications, implying that Starbucks would begin accepting cryptocurrency payments, according to an article from the Cryptocurrency News Network.
A spokesperson for Starbucks told Motherboard that “it is important to clarify that we are not accepting digital assets at Starbucks. Rather, the exchange will convert digital assets like Bitcoin into US dollars, which can be used at Starbucks.” The company stressed in a press release last Friday that it would play a “pivotal role” in backing regulated consumers applications to help swap their cryptocurrencies into fiat for use at retail outlets.
The Bottom Line
Starbucks’ partnership with Microsoft and ICE represents another step in bringing cryptocurrency to the mainstream, by allowing people to use cryptocurrencies in transactions. However, it should be noted that customers will not be able to use cryptocurrencies to purchase products directly, but that their cryptocurrencies would be converted to a national fiat currency before making the transaction. While the development seems promising, the development in an industry that is not secure might require a secure platform to facilitate such transactions without exposing them to attack.