Starbucks = Moon Buck$ for Cryptocurrency Hodlers
In the biggest crypto news of 2018, it was announced this morning that Starbucks is collaborating with Microsoft and the Intercontinental Exchange (ICE), owners of the New York Stock Exchange (NYSE) in addition to other global marketplaces, to launch a startup venture called Bakkt that will allow for on-ramps to crypto assets for institutional and retail investors in a federally regulated fashion. Starbucks, Microsoft, and ICE have reportedly been working on this venture furtively for nearly 14 months with the motivation to create a platform for Bitcoin and cryptocurrencies to be utilized as mainstream currencies. This November, Bakkt will go live giving retail and institutional investors the opportunity to buy, sell, store and spend cryptocurrencies. Maria Smith, VP of Partnerships & Payments for Starbucks commented that “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.” Will cryptocurrency hodlers become crypto spenders at Starbucks? We will find out in November.
The CEO of Bakkt will be Kelly Loeffler, the current chief communications and marketing officer at ICE, and wife of ICE chairman and CEO Jeff Sprecher. Sprecher noted that he and Loeffler had “brainstormed for five years to find a strategy for digital currencies.” Sprecher went on to say that he is “an engineer who likes to fix things that are broken, and Bitcoin was the epitome of a broken model that if fixed, could change the world.” If that doesn’t give you goosebumps for the potential of the cryptocurrency space, I don’t know what will.
In other major news, Bakkt plans to offer access to a new Bitcoin trading platform on the ICE Futures U.S. exchange in addition to full custodial services. In contrast to the CBOE Bitcoin Futures market, the ICE Futures exchange purports to give settlements in BTC, not cash. Using Microsoft’s cloud, Bakkt will build “an open and regulated global ecosystem for digital assets,” as stated in ICE’s press release.
At the time of writing, the cryptocurrency markets have increased by around $1.3 billion. With the magnitude of this news for a market desperate for bullish sentiment, I’m fairly surprised the move wasn’t higher. Additionally, ICE dropped $0.08 to $72.81 for a loss of 0.11%, SBUX gained $0.55 to $52.23 for a gain of 1.06%, MSFT gained $0.46 to $108.03 for a 0.43% gain.
In conclusion, there are a few more questions that I hope to get answered regarding this excellent news. For one, how will Starbucks acceptance of crypto as payments affect capital gains tax if at all? Because as many know, each transaction between cryptocurrencies as well as crypto to fiat dollars is a taxable transaction. Additionally, I wonder which cryptocurrencies will be acceptable as payments at Starbucks locations. Furthermore, will the Bakkt ecosystem extend internationally for Starbucks around the globe to accept cryptocurrencies or does this just pertain to domestic Starbucks transactions. Either way, this is an extremely exciting development in the cryptocurrency space and I’m very excited to see how Bakkt progresses.