Is Starbucks Signaling Wider Acceptance of Cryptocurrency?

You can't pay for lattes with Bitcoin yet, though

Author: Krista Garcia

August 7, 2018

When certain companies make announcements, people pay attention. The news that Starbucks was among the companies working with Intercontinental Exchange on creating a platform called Bakkt that will allow consumers to "buy, sell, store and spend digital assets on a seamless global network" was widely interpreted as a sign that the coffee giant was set to accept cryptocurrency payments. 

Not exactly. The idea, according to Starbucks, isn't to take Bitcoin as currency for pumpkin spice lattes but rather to enable the exchange of Bitcoin for US dollars to spend at Starbucks. 

Even so, is the fact that a major US company is getting involved with cryptocurrency a signal that this niche payment method is mainstreaming, or is it simply a customer-centric retailer offering more options?

Most internet users worldwide are aware of cryptocurrency, but fewer than half own it. When polled in February by SharesPost, 71% of cryptocurrency owners planned to buy more this year, and 21% of non-owners planned to start. 

But a more recent US-focused survey by Wells Fargo showed far lower levels of adoption and interest, perhaps due to the plunge Bitcoin experienced this year. In May 2018, 72% of US investors (adults who have invested $10,000 or more) had no interest in ever buying Bitcoin. Just over one-quarter were interested, though. Higher levels of men (30%) and consumers under age 50 (41%) were interested but holding off on buying Bitcoin.

Starbucks might be the highest profile company getting involved with cryptocurrency, but it's not alone. Overstock.com became the first major retailer to accept Bitcoin in 2014. According to The New York Times, the online retailer generates roughly 0.2% of its revenues from cryptocurrency.

But retailers that accept cryptocurrency generally are less well known. And when big names sign on, they tend to seem like marketing stunts, such as Burger King Russia's Whoppercoin and KFC Canada's "The Bitcoin Bucket."

Most retailers don't accept cryptocurrency. In a December 2017 survey of retailers in North America by (BRP) Boston Retail Partners, none were accepting this form of alternative payment. Just 3% said they would within the next 12 months. The vast majority (85%) were taking a wait-and-see approach. 

It might just take a household name to get the public on board. According to a February 2018 survey by LendEDU, a majority (51.7%) of US internet users said they would be open to using an Amazon-created virtual currency. And that figure was even higher for Prime members (58.3%).