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Starbucks involved in new cryptocurrency venture

Coffee chain Starbucks is one of several companies – and the central retail partner – helping with the launch of a new regulated, 'Bitcoin futures contract and warehouse company' planned for November 2018.

Global exchanges and data listing services operator Intercontinental Exchange is planning to launch Bakkt, which will use Microsoft cloud solutions to create what it describes as "an open and regulated, global ecosystem for digital assets".

Bakkt is drawing on expertise from leading companies across regulated markets, risk management, technology and consumer experience including Boston Consulting Group (BCG), Microsoft and, on the retail side, Starbucks.

The Bakkt ecosystem’s first use cases will be for trading and conversion of Bitcoin versus fiat currencies, with Intercontinental Exchange saying Bitcoin is viewed as the most liquid digital currency today.

It said the move has been designed to “address evolving needs in the estimated $270 billion digital asset marketplace”. By leveraging trusted market infrastructure, it noted, Bakkt is being engineered to “help the digital asset markets evolve securely and efficiently while supporting transaction flows”.

Maria Smith, vice president of partnerships and payments for Starbucks, commented: “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.”

Bakkt is currently in preparation for launch and further details about the initiative are expected to be announced in the coming weeks.

Jeffrey Sprecher, founder, chairman and CEO of Intercontinental Exchange, said: “In bringing regulated, connected infrastructure together with institutional and consumer applications for digital assets, 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.”

Part of the Bakkt offering is expected to help support the emergence of regulated venues which will establish new protocols for managing the specific security and settlement requirements of digital currencies.

Sean Collins, senior partner at BCG, remarked: “Blockchain technology holds tremendous potential to enable new business models and trusted ecosystems.

“By leveraging and developing fundamental market infrastructure, the Bakkt platform will enable firms across industries to accelerate a range of innovation.”

Intercontinental Exchange and M12, Microsoft’s venture capital arm, are key investors in Bakkt. Other investors are expected to include an affiliate of Fortress Investment Group, Eagle Seven, Galaxy Digital, Horizons Ventures, Alan Howard, Pantera Capital, Protocol Ventures, and Susquehanna International Group.

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