New York Stock Exchange’s Owner Wants to Make Crypto Mainstream with Bakkt

Global exchanges operator Intercontinental Exchange (ICE), which owns the New York Stock Exchange (NYSE), will in November launch a new digital asset platform. The new company will be called Bakkt, and will be launched in partnership with Microsoft, Starbucks and BCG Consulting.

According to Loeffler, the name ‘Bakkt’ is a play on the word ‘backed’, intended to convey a trustworthy investment instrument.

Bakkt’s investors are expected to include Eagle Seven, an affiliate of Fortress Investment Group, Horizons Ventures, Galaxy Digital, Alan Howard, Pantera Capital, Protocol Ventures and Susquehanna International Group, LLP.

At present, the launch remains subject to pending regulatory approval.

Elaborating on the new platform, Kelly Loeffler, CEO of Bakkt described Bakkt thus:

Kelly Loeffler

“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. We are collaborating to build an open platform that helps unlock the transformative potential of digital assets across global markets and commerce.”

Bakkt will leverage Microsoft’s cloud solutions to formulate an open and regulated global ecosystem for digital assets. Early use cases are expected to include the trading and conversion of Bitcoin versus fiat currencies, for one.

Yet the platform envisions a much wider application, including as a kind of network on which customers and institutions can buy, sell, store and expend digital assets across stores.

In the near future, the ecosystem is expected to also include federal-regulated markets, warehousing, merchant and consumer applications in its fold.

Buying Coffee with Bitcoin

Starbucks as a commercial partner also means that users will be able to purchase coffee using cryptocurrencies like bitcoin.

Maria Smith

“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,” Maria Smith, Vice President, Partnerships and Payments for Starbucks was quoted as saying in a press release.

“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,” she added.

Fostering Cryptocurrency Acceptance Through Market Regulation

Bakkt’s launch as a regulated investments platform could turn the tide of traditional financial institutions’ thus far stubborn resistance of cryptocurrencies forming a new financial asset class.

Founder, Chairman and CEO of Intercontinental Exchange, Jeffrey C. Sprecher affirmed as much in stating the motivating factors behind Bakkt’s creation:

Jeffrey C. Sprecher

“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.”

Subject to CFTC (Commodity Futures Trading Commission) approval, ICE’s US-based futures exchange and clearing house is planning to launch a one-day only physically delivered Bitcoin contract and physical warehousing as an early component of the Bakkt offering in November.

The aim is to establish new protocols which cater to the specific security and settlement requirements of digital currencies.

Additionally, the clearing house expects to set up a separate guarantee fund to be funded by Bakkt itself.

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