NYSE Operator to Launch New Global Digital Assets Platform
Intercontinental Exchange (ICE), a leading operator of more than 20 global exchanges, clearing houses, data and listings services, announced on Friday, August 3, that it plans to form a new company, Bakkt, which will leverage Microsoft cloud solutions “to create an open and regulated, global ecosystem for digital assets.”
According to the press release, Bakkt is working with a marquee group of organizations including BCG, Microsoft, Starbucks, to create an integrated platform that enables consumers and institutions to buy, sell, store and spend digital assets on a seamless global network.
Designed to enable consumers and institutions to seamlessly buy, sell, store and spend digital assets. Formed with the purpose of bringing trust, efficiency and commerce to digital assets.
— NYSE (@NYSE) 3 August 2018
In addition to ICE and M12, Microsoft’s venture capital arm, Bakkt is expected to be backed by a range of other investors, including an affiliate of Fortress Investment Group, Eagle Seven, Galaxy Digital, Horizons Ventures, Alan Howard, Pantera Capital, Protocol Ventures, and Susquehanna International Group, LLP.
The company says the Bakkt ecosystem is expected to include federally regulated markets and warehousing along with merchant and consumer applications.
The move will see ICE not only launch a physically-settled bitcoin futures product but also custody cryptoassets directly and help merchants such as Starbucks — which has already signed onto the platform as a partner — accept digital assets such as bitcoin for everyday payments.
“Its first use cases will be for trading and conversion of Bitcoin versus fiat currencies, as Bitcoin is today the most liquid digital currency. The effort is designed to address evolving needs in the estimated $270 billion digital asset marketplace,” the announcement says.
As an initial component of the Bakkt offering, Intercontinental Exchange’s U.S.-based futures exchange and clearing house plan to launch a 1-day physically delivered Bitcoin contract along with physical warehousing in November 2018, subject to CFTC review and approval.
These regulated venues will establish new protocols for managing the specific security and settlement requirements of digital currencies. In addition, the clearing house plans to create a separate guarantee fund that will be funded by Bakkt.
“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.”
Today’s news confirms rumors in May that ICE is in the process of developing a cryptocurrency trading platform. ICE reportedly had conversations with other financial institutions about setting up the new business and the trades will take the form of swaps.
Earlier this year, ICE joined forces with blockchain company Blockstream to launch a data feed that would pull information from more than 15 global cryptocurrency exchanges and deliver it to financial firms.
Meanwhile, speaking with Fortune, ICE founder, Chairman, and CEO Jeffrey Sprecher explained that he believes that — bolstered by Bakkt’s infrastructure — bitcoin could become the currency of choice for global payments.
”Bitcoin would greatly simplify the movement of global money,” said Sprecher. “It has the potential to become the first worldwide currency.”
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