The Bakkt-Starbucks tradeoffs: “disproportionately high” amount of free shares

04 Mar, 2019
by Alberto Arnaldo
News
The Bakkt-Starbucks tradeoffs: “disproportionately high” amount of free shares

Bakkt, the much-awaited (but delayed) platform that is being developed by Intercontinental Exchange to provide a broad range of services such as trading and warehousing crypto, is quite an institutional investment, aiming at attracting more institutional investors.

The most renowned partner announced prior to the launch has been Starbucks, allowing crypto to fiat payments for coffee, in what has been interpreted from the crypto space as a possible catalyzer for greater adoption of Bitcoin and other tokens by the mainstream.

Coinbase and paywall funded crypto news site The Block published today a $1,000 yearly-worth paywall-protected article which appears to delve deeper into the details of the deal between Bakkt and Starbucks, judging from some extracts shared via Twitter.

Read more: Bakkt CEO gives insight into the Starbucks partnership and the BTC futures delayCoinbase admits that the previous third-party provider sold client data

The most important revelation is that Starbucks has received a “disproportionately high” percentage of Bakkt shares in return for their support, without actually making any significant cash investments other than some marketing budget, according to unidentified sources.

Crypto Twitter has been reacting on a mostly positive way but without directly reflecting on the news, as the case for adoption regarding Bakkt and Starbucks still seems to be the dominant thought.

Pretty much, all of what Starbucks will have to do to get that juicy pack of Bakkt shares will be to let them install their crypto to fiat payments system in shops. The service will only be available in the U.S. in the beginning, although it might as well expand to the rest of the world later.

A risky scenario could arise in case Starbucks expands the service internationally, as the possibility of directing payments straight into USD from foreign currencies is likely to inspire further tax avoidance by the coffee marketer. Starbucks only payed an effective tax rate of 2.8% on its UK-based European Unit, according to Financial Times. The company has been consistent on this behavior at least for a decade, according to Reuters.

Read more: Bakkt still on track for "phase 2" partnerships with Starbucks, Microsoft'Now you will be able to use Bitcoin to buy Starbucks & Teslas' Tim Draper says

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