Will Starbucks play a key role in the mainstream adoption of cryptocurrency?
The global coffeehouse giant Starbucks has now become one of the most large-scale companies to look into crypto, and its plans have finally been confirmed this week. The company has collaborated with Microsoft to track its coffeehouse business with a blockchain.
According to some reports, the coffeehouse chain might start accepting bitcoin (BTC) payments in its U.S. branches later this year. So, is the long-awaited mainstream application finally coming to the crypto market?
Like many companies which are entering the blockchain market, Starbucks leans toward the “blockchain before bitcoin” approach
Relationship between Starbucks and crypto could be traced back to January 2018, when it’s executive chairman and former CEO Howard Schultz discussed the subject during the company’s Q1 2018 earnings call.
Schultz seemed to be sceptical about bitcoin at the time, saying that it won’t be a major currency today or in the future. However, the chairman also said that some other cryptocurrencies might succeed instead.
The Seattle based coffeehouse chain in August 2108, revealed that they are BAkkt’s key partner alongside Microsoft and consultancy Boston Consulting Group. Expected to launch later this is Bakkt is supposed to be a digital asset platform created by Intercontinental Exchange (ICE).
According to the official press release, Starbucks would not only be working with Bakkt to create its platform, but it would also be using it to accept crypto payments in its coffee stores.
The news provoked headlines, according to CNBC, the new Starbucks collaboration with Microsoft allows customers to pay for Frappuccinos with bitcoin.
In March, new information about Starbucks’ collaboration with Bakkt surfaced, confirming its intention to accept BTC-based payments once an equity deal between the two is struck.
Thus, according to a report given out by The Block citing anonymous sources, Starbucks will be making use of Bakkt’s payment software in its branches situated in the U.S., which will allow customers to pay with cryptocurrency. This will only be available exclusively for U.S. customers first.
It’s not a actually not a new case of retail adoption as there already are many BTC-merchants offering this service, says Michael Dowling, CEO and founder of FairX, a financial services company involved with banking and management of digital assets, and former chief technology officer at IBM’s blockchain arm.
Charlie Smith, who is an analyst at asset management organization Blockforce Capital, however, suggests that Starbucks’ expected arrival into the field of Bitcoin (BTC) payments is a mostly a positive thing for the crypto market as it is. According to him, while some may try to downplay this news because Starbucks will be instantly converting bitcoin payments into real currency.
As for the instant conversion of BTC, Smith said it should be somehow similar to how a normal company converts payments made in euros into U.S. dollars. According to him, there is a big difference between retail adoption of bitcoin or other cryptocurrencies out there and those same corporations being able or willing to deal with the exchange rate risks that come with any multinational organization. Starbucks’ idea of instantly converting bitcoin payments into fiat currency does not have a major impact on the retail use case for bitcoin any more so than a normal company converting payments made in one currency to another.