ICE CEO said all types of financial institutions are talking to Bakkt to explore the possibility of adopting its offering. It’s planned to launch a consumer app in early 2020.
Bitcoin may have different names and “digital gold” is surely one of them. However, if it’s to believe Intercontinental Exchange’s chief executive’s words, it first has to start being used more in everyday business.
ICE head Jeffrey Sprecher said on Thursday that the constant use in transactions is the crucial step for Bitcoin if it wants to be regarded as a long-term store of value. ICE’s Bakkt subsidiary, which recently (finally) started with its Bitcoin futures market, announced earlier in the week that it is creating a new app for consumers that enables them to buy goods from merchants, starting with Starbucks.
Sprecher claims that plenty of Bakkt’s employees already see Bitcoin as digital gold, but, to him, this seems a little too early.
He noted:
“Because I’m old I think of how gold became a store of value because at one point it was a currency. We had gold coins, it was in circulation, and over time because of the nature of its ability to spend, … it became a store of value and today, you know, in a crisis we all accept gold as a form of payment.”
He added Bitcoin could follow the same path regarding its evolvement and mining capabilities. Sprecher added:
“We don’t think that that that whole space will be relevant and grow unless there are real use cases and we do … think that a use case is going to be the digital transfer of value through payments.”
However, different from other Bitcoin’s critics, Sprecher thinks this could be reasonable.
Users who do trade directly with Bitcoin could steer clear from the foreign exchange costs that are connected with converting up and down between fiat. Therefore, what Bakkt is trying to do is serving this sector by forming a digital platform to ease such kind of transactions.
ICE has around 50 individuals who are employed in working on payment infrastructure for Bakkt. The consumer app should be out at the beginning of 2020.
Sprecher went on explaining the motivation Bakkt had talking about launching Bitcoin options, which company plans to do in December.
He said:
“You know, retail global retail customers have been very comfortable for whatever reason being early adopters on unregulated platforms that call themselves exchanges, but really have no particular regulatory oversight. We think there’s an opportunity as what we’re building out with Bakkt to bring that whole thing into a more transparent regulatory footprint and lend our expertise.”
When Bakkt went live with its Bitcoin futures in September, the company witnessed the low volume for its Bitcoin futures contracts at first. However, it seems trading is slowly but surely going up.
“We’re not dependent on the prices that come out of these unregulated cash markets. We develop our own settlement price and so that lends itself very nicely to an options market where people that trade options and hedge with the underlying can have perfect hedging in one venue that they know is transparent,” concluded Sprecher.
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