The Intercontinental Exchange (ICE), which owns the New York Stock Exchange, announced the formation of a new company–Bakkt–to help launch a federally-related market for cryptocurrencies and gain more acceptance for use in retail business transactions. If this platform proves successful, its technology could make way for the formation of cryptocurrency funds like 401(k) retirement plans.
Breaking into these areas of the capital markets like retirement accounts is certainly an ambitious goal for Bakkt since Bitcoin is still attempting to gain worldwide acceptance as a form of currency accepted by businesses for commercial transactions. News regarding cryptocurrency exchange hackings and other security issues are stymieing any efforts to bring Bitcoin, or any form of digital currency, to mainstream acceptance.
“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, the chief executive officer of Bakkt who was until recently head of communications at ICE. “We are collaborating to build an open platform that helps unlock the transformative potential of digital assets across global markets and commerce.”
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ICE hopes to change that perception with the introduction of a one-day futures contract that differentiates itself from derivatives offered by U.S. competitors CME Group Inc. and Cboe Global Markets Inc. because it’s physically delivered. Contract owners will receive Bitcoin upon expiration as opposed to cash–this aspect of physical delivery could help Bitcoin can help gain more acceptance by financial institutions who are wary of the unregulated markets where Bitcoin currently trades.
Relaed: Poll Says Most U.S. Investors ‘Have No Interest in Ever Buying Bitcoin’
Appease Starbucks Cravings with Bitcoin
Caffeine cravings, Starbucks in particular, could be appeased with Bitcoin as the Seattle-based company is part of the Bakkt joint venture with ICE to integrate digital currencies into global commerce. ICE said in addition to Starbucks, Microsoft Corp is also part of the effort to help digital currencies gain more acceptance in ecommerce.
“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, vice president of partnerships and payments for 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.”
Bitcoin Falls Below $7,000
Bitcoin fell below $7,000 over the weekend, stumbling to its lowest level in about three weeks. As of 1:30 p.m. ET, the price of the leading cryptocurrency is $6,969.49.
Interest by institutional investors within the last month helped to prop up Bitcoin’s price to over $8,000, but that appears to be waning. The news of the ICE and Starbucks venture gave Bitcoin a momentary boost before a spokesperson for the coffeehouse giant parried any notion that they will be accepting digital currencies as a form of payment anytime soon.
“If you really dig into it, the service would allow customers to convert their cryptocurrency at the time they’re making the purchase,” said Ryan Taylor, chief executive officer of Dash Core. “They’re clarifying that ’hey, we’re not getting into cryptocurrency speculation here — we’re accepting dollars, same as we always have.’”
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