If you read any of the ‘will Starbucks or won’t Starbucks accept cryptocurrency’ stories from last week you might be a little confused. Martha Bennett, Principal Analyst at Forrest Research, explains why the company won’t be accepting cryptocurrency in its coffee shops anytime soon.
The news of the company’s interest doesn’t change anything over whether crypto is becoming mainstream. Bennett comments: “Has anything changed since this story broke? The answer is no.”
“When the story first broke it was completely misreported as though Starbucks was going to accept cryptocurrency, when they categorically declared they weren’t”, she continues.
She explains it is difficult for cryptocurrency and retail at the point of sale. This is because: “quite simply it doesn’t make sense. It costs too much and it is too slow to accept it.”
The value of cryptocurrency is “too volatile” to be able to process the transaction as it changes “from hour to hour.”
She describes cryptocurrency as “randomly generated numbers which someone had chosen to associate a value.” Bennett has been analysing cryptocurrency for more than four years now. She describes it as “not a bad thing” that a major enterprise such as Starbucks is looking at becoming involved.
Many startups in this field do not get anywhere as the technology fails or there is some other shortcoming. “If they create a new platform that allows crypto to become part of this world, it is not a bad thing.”
The story broke just a week or so ago when the Seattle-based coffee giant announced it would be joining and supporting a project called Bakkt. This will leverage Microsoft’s cloud solutions – potentially the Azure Blockchain-based platform – creating the infrastructure needed to manage and use digital assets.
Then some analysts put two and two together and made 40. It’s quite a leap to assume that we will soon be buying our frappuccinos with crypto at one of Starbucks 28,000 outlets around the world. It will function in a way that is more akin to a demand exchange.
The exchange functions by converting digital assets like Bitcoin into currencies such as the US dollar which can then be used in the likes of Starbucks. A press release, dated 1st August, said Bakkt will be a “regulated, global ecosystem for digital assets” that will enable customers and institutions “to buy, sell, store, and spend digital assets.”