The coffee behemoth Starbucks wants to use crypto to manage their almost $1.6 billion in cash obtained through customer's use of prepaid gift cards.
The Seattle-based company has over 30,000 stores all over the world. If it expands its asset management business, it’s going to become a fintech giant and a notable competitor for banks in Korea. At the moments, Starbucks is offering its customers prepaid cards in SBUX, allowing for the coffees to be taken in advance. It seems people who want coffee worth of $1.6 billion by using their gift cards are acting just like creditors who really put their trust in the company.
Starbucks Loaning Money Without Paying Interest
This strategy is a way in which Starbucks is loaning money without paying interest. As a result of problems with regulations and because it has to manage many fiat currencies, it’s only logical for the company to manage its huge loans in crypto.
SBUX Was Used as an Example for Multinationals
In April 2019, Gavin Brown, the founder of Blockchain Capital, has made the suggestion for multinationals to launch their own coins, just like Starbucks launched the SBUX prepaid cards. It’s not yet known if the coffee giant is going to issue a cryptocurrency or continue to rely on the already existing one.
However, it has been dealing with crypto for some time, as it has made a serious investment in Bakkt, the ICE-backed Bitcoin (BTC) exchange. The two companies have partnered up to work on a consumer app for making crypto payments to Starbucks.
Korean Banking Groups Alarmed
Many Korean banking groups have been alarmed by Starbuck’s decisions, and have described the company as their rival because it threatens the survival of banks on the financial market. Their fears are that Starbucks is going to stir things up for the conventional financial setting by offering customers prepaid gift cards, which cards haven’t yet been financially regulated. This is what Kim Jung-tai, the Chairman of Hana Financial Groups said about Starbucks:
“Technologies have allowed coffee companies like Starbucks to be our rivals. It will be fine to call Starbucks an unregulated bank, not a mere coffee company.”