Bakkt to enter cryptocurrency payments space with consumer app in early 2020
It's worth stepping back and admiring just how radical this move is.
Bakkt will be launching a consumer cryptocurrency payments app in the first half of 2020, taking it for a test drive with Starbucks around that time, announced Bakkt CPO Mike Blandina.
"Billions of dollars in digital assets exist today across the world, such as bitcoin, cashback and rewards, in addition to other forms of digital value relied upon by consumers and merchants... Our vision is to provide a consumer platform for managing a digital asset portfolio, whether they wish to store, transact, trade or transfer their assets," he explains.
But the app is just the front end of a significantly more monumental and vague task of "unlocking the value of digital assets".
Blandina breaks down this mission across four points.
1. The consumer app
One of these points is the consumer app, which aims "to make it easy for consumers to discover and unlock the value of digital assets" as well as to engage with the wider marketplace around these assets.
2. Digital-asset infrastructure
Another is building the digital-asset infrastructure to support this goal.
"Over the last year, we’ve assembled a strong team of payments engineers and are nearing completion of our core payments and compliance platform," he writes.
"We're now focused on the development of the consumer app and merchant portal, as well as testing with our first launch partner, Starbucks, which we expect in the first half of next year."
3. Maximising control
A third is "maximising control". Specifically, giving customers a high level of control over their digital assets and as-complete-as-possible flexibility on how they're used and giving merchants more control over costs and how they interact with customers.
For a practical sense of what this might mean, imagine if any merchant could easily customise and experiment with different payment schedules, rather than needing to shunt customers into crude payment categories like "per transaction" or "monthly subscription". Or how about cross-border microtransactions?
4. Establishing trust
"Bakkt's approach to secure technology, privacy and innovation means that we are an advocate for consumers who have yet to enter the digital asset space, and for merchants who want to accept new, efficient forms of payments without increasing risks," Blandina writes.
Of course, until that trust is established, you're just taking Bakkt's word for it.
In the long run
This development brings some snacks for thought.
First, Bakkt parent company, Intercontinental Exchange, really hasn't been at the consumer level, historically. It owns exchanges for financial and commodity markets and for central clearing houses. Its move into the consumer payments space via Bakkt is cutting out a lot of middlemen as is the push towards letting individuals "maximise control" of their own digital asset portfolios.
It just goes to show, tech companies aren't the only ones coming to eat the banks' lunch.
In particular, this sense of giving individuals and businesses a high level of personal control over their own wealth by putting out this infrastructure that lets people tap into a wide world of digital assets is quite at odds with the fundamental role of commercial banks as companies that hold your money and do everything with it on your behalf.
It's worth emphasising how radical Bakkt's long-term goals are to the current status quo.
"Based on years of seeing how small shifts can lead to wholesale change in an industry, I have strong conviction that by driving more integration and efficiency across digital wallets, transaction processing and payment acceptance, there are meaningful opportunities for merchants and consumers to seamlessly interact using digital assets in ways that have not been previously considered," Blandina writes.
Disclosure: The author holds BNB and BTC at the time of writing.