Last month, the owners of the New York Stock Exchange quietly bought a domain name for a made up word. The misspelled wordplay belongs to startup Bakkt—pronounced ‘backed’—which had been in the works for months.
Bakkt introduced itself to the world Friday as a digital asset ecosystem hoping to make cryptocurrency mainstream for consumers and merchants. That’s the goal of many a crypto company, but this time it might be more than just talk. Bakkt will launch with an impressive global partner, Starbucks.
“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,” said Maria Smith, the coffee company’s vice president for partnerships and payments, said in a press statement.
Hitching wagons with Starbucks is, of course, no small boon to how prolific Bakkt could be. The coffee retailer has the most popular mobile pay app in the world. Yes, more popular than Apple Pay or Google Pay.
At least once every six months, 20.7 million people use Starbucks’ mobile pay system according to research firm eMarketer. If everything goes according to plan, those people could use Bitcoin instead of cash by November.
“Starbucks is committed to innovation for expanding payment options for our customers,” Smith said.
Other merchants have tried to integrate cryptocurrency payments. Overstock.com was the first and says it generates as much as $120,000 in revenues from cryptocurrency payments every week. Travel site Expedia had accepted Bitcoin for some travel services but removed it as a payment option in June.
Both sites collaborated with Coinbase Commerce, the popular exchange’s product that lets merchants accept cryptocurrency payments. The service just announced integration with WooCommerce which claims it handles payments for more than 28 percent of the world’s ecommerce stores. Coinbase Commerce also integrates with Shopify.
Every effort so far though pales in comparison—both scope and relevance—to Bakkt’s partnership with the international coffee giant. Starbucks will give Bitcoin brick and mortar status and could be the final word to naysayers who believe cryptocurrency could never be used as, well, currency. It could also be the first step in legitimizing cryptocurrency to the institutional investing world.
“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,” said Kelly Loeffler, CEO of Bakkt, in the press release announcing the startup. “We are collaborating to build an open platform that helps unlock the transformative potential of digital assets across global markets and commerce.”
Bakkt says its ecosystem will include federally regulated markets and warehousing that work alongside applications for merchants and consumers. In it’s press release, Bakkt said it expects to establish new protocols for managing the specific security and settlement requirements of digital currency.
Bakkt will use Microsoft cloud solutions to create the open network. Approval from the CFTC is still pending.
“We aim to build confidence in the asset class on a global scale, consistent with our track record of bringing transparency and trust to previously unregulated markets,” said Jeffrey C. Sprecher, chairman and CEO of Intercontinental Exchange (ICE), which owns NYSE and Bakkt.
Cryptocurrency social media channels cheered the move. Crypto YouTuber Kevin Rooke tweeted, “Starbucks serves 60 million people (mostly no-coiners) every week across the world. Starbucks is legitimizing Bitcoin by choosing to accept it.” Anthony Pompliano, known on Twitter solely as ‘Pomp’ said, “This may be the biggest news of 2018.”
The partnership with Starbucks, one of the world’s most recognizable brands, is so much more than Bitcoin having a hand shake with big business. It’s a coming out party that will help billions of dollars in institutional money, thus far too squeamish for Bitcoin, acquiesce. Wall Streeters may soon buy a cup of joe with Bitcoin in the morning and then head to the office to trade it. Bakkt, no doubt, is aiming to make Bitcoin “normal,” and there’s nothing more normal than coffee.