Intercontinental Exchange, which is a parent company of 23 leading global exchanges including the New York Stock Exchange (NYSE), has recently announced plans to embrace cryptocurrencies. Specifically, said that a new company will be formed, called Bakkt, that will offer an open and regulated, global ecosystem for digital assets; and that will enable consumers and institutions to buy, sell, store and spend digital assets on the network.
And considering the wide reach of Intercontinental Exchange, this is a major and important step for the entire crypto industry. So yes, we’re giving it some space on Wallet Weekly.
Major partners are on board
For starters, the company has decided to get a tech partner, Microsoft, which will provide its cloud solutions to create the new offering. The Redmond-based software giant is also an investor through its venture arm M12, along with Eagle Seven, Mike Novogratz’ Galaxy Digital, Horizons Ventures, Alan Howard, Pantera Capital, Protocol Ventures, an affiliate of Fortress Investment Group and Susquehanna International Group, among others.
On the solution development front, Intercontinental Exchange will be working with BCG and Starbucks, in addition to Microsoft. Starbucks’ participation could be especially interesting, as it could help bring cryptocurrencies to mainstream users — who in turn would be able to spend their Bitcoin, Ethereum, Litecoin and other crypto holdings at the popular coffee chain.
Starting with Bitcoin
As Bitcoin is the most liquid digital currency, Bakkt’s platform will kick off by enabling trading and conversion of Bitcoin versus fiat currencies. This effort, they say, is designed to address evolving needs in the estimated $270 billion digital asset marketplace.
“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,” said Jeffrey C. Sprecher, Founder, Chairman and CEO of Intercontinental Exchange.
As an initial component of the Bakkt offering, Intercontinental Exchange’s U.S.-based futures exchange and clearing house plan to launch a 1-day physically delivered Bitcoin contract along with physical warehousing in November 2018, subject to CFTC review and approval.
These physically-delivered BTC futures contracts are different than those currently offered on CME and CBOE as they are ultimately settled in fiat. And this physical delivery is said to have the potential to open “the floodgates” to institutional capital and eventually result in some “big price moves” in the crypto markets.
In addition, Intercontinental Exchange’s U.S.-based clearing house also plans to plans to create a separate guarantee fund that will be funded by Bakkt.
“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,” Kelly Loeffler, CEO of Bakkt, said in a statement. “We are collaborating to build an open platform that helps unlock the transformative potential of digital assets across global markets and commerce.”
BCG’s Senior Partner Sean Collins shares the positive sentiment, adding that by leveraging and developing fundamental market infrastructure, the Bakkt platform will “enable firms across industries to accelerate a range of innovation.”
More details to be unveiled soon
Bakkt’s press release ends with a note that we should “stay tuned” to get “further operational details” soon.
Starbucks is apparently preparing to support Bakkt’s efforts — and benefit from them — to enable you and me to pay for our coffee with bitcoin and other cryptocurrencies.
“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,” Maria Smith, Vice President of Partnerships and Payments for Starbucks, said in a statement.
And that… is one of the reasons we love Starbucks. 😉