ICE, the owner of the New York Stock Exchange, announced that they are starting a new company called Bakkt. Bakkt will offer a federally regulated market for Bitcoin. Bakkt was launched in partnership with established companies such as Microsoft, Boston Consulting Group, and Starbucks.
According the ICE press release, the first use cases will be for trading and conversion of Bitcoin versus fiat currencies, as Bitcoin is today the most liquid digital currency.
“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, CEO of Bakkt. “We are collaborating to build an open platform that helps unlock the transformative potential of digital assets across global markets and commerce.”
The first Bakkt offering will be a 1-day physically delivered Bitcoin contract in November 2018. They aim for this to establish new protocols for managing the specific security and settlement requirements of digital currencies.
The Bakkt infrastructure will establish Bitcoin as a sound offering for institutional investors and money managers. These money managers can then offer Bitcoin mutual funds, pension funds, and ETFs.
Another goal of Bakkt is to establish Bitcoin as a retail payment product.
“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 U.S. dollars for use at Starbucks,” said Maria Smith, vice president, Partnerships and Payments for Starbucks, in the press release.
In addition to Intercontinental Exchange and M12, Microsoft’s venture capital arm, investors in Bakkt are expected to include, among others, an affiliate of Fortress Investment Group, Eagle Seven, Galaxy Digital, Horizons Ventures, Alan Howard, Pantera Capital, Protocol Ventures, and Susquehanna International Group, LLP.