US Postal Service Mulls ‘Postcoin’ to Revive Business

The U.S. Postal Service has been investigating possible ways to use blockchain technology to provide services to customers more efficiently. Blockchain technology could soon be used to deliver post office financial services, identity services, supply chain management, and device management. A new report examines these applications and proposes a Postcoin platform to deliver them.

Also read: Australia Post: ‘Uber-Like’ Shift Awaits Parcel Services

The U.S. Postal Service Office of Inspector General issued a report Monday outlining possible applications of blockchain technology to Postal Service operations. Compiled with the aid of consulting firm Swiss Economics, the report, “Blockchain Technology: Possibilities for the U.S. Postal Service,” recommends the Postal Service further explore the use of blockchain technology and suggests ways that the USPS could experiment with the blockchain to deliver postal services.

Developing a ‘Postcoin’ Platform

The Postal Service already offers financial services such as postal money orders and money transfers. Streamlining these services is the most obvious application of blockchain technology. The report from the Inspector General’s office suggests developing a Postcoin platform to deliver these services. The report outlines two methods of deploying Postcoin: bootstrapping a new blockchain or buying into an existing one.

Postcoin is described as having potential worldwide benefits, expanding postal and financial services and interoperability to more countries and more broadly within those countries.

“Although the Postal Service could develop its own platform, Postcoin would be strongest as a global postal money transfer and payment platform,” the report states. “Postal operators around the world have an unmatched physical presence that extends across more than 600,000 post offices worldwide, including areas where rates of financial exclusion are higher.”

Employing blockchain technology could aid the Postal Service in achieving the goals outlined in an earlier OIG report, “Providing Non-Bank Financial Services for the Underserved,” issued in 2014. That report argued the merits of post offices providing ancillary non-bank financial services to better serve underbanked communities, including prepaid debit cards, bill pay services, mobile payments, and even small loans.

The Blockchain Technology report describes the workings of Bitcoin and alternative cryptocurrencies that employ blockchain technology, discussing several altcoins in particular, including Litecoin, Peercoin, Omni Layer, Ripple, Ethereum, and NEM. The report goes on to outline various blockchain consensus mechanisms, such as proof of work and proof of stake.

Building the ‘Internet of Postal Things’

Beyond financial services, the report’s authors outline several possible uses of blockchain for the Postal Service in the more distant future. These include identity services to provide verified digital identification enabling users to notarize documents, log in to secure websites or participate in certain smart contracts. These examples would be an expansion of the identity services the USPS currently offers such as passport application processing.

The Postal Service report envisions using the blockchain to manage every device involved in delivery, stating “Blockchain may be a viable way for the Postal Service to build and manage an Internet of Postal Things at a lower cost than traditional, centralized methods.”

As an example, the report suggests a self-maintaining mail truck that issues a smart contract to order and install replacement brake pads when it senses the old ones wearing out.

Blockchain technology could also serve the USPS in supply chain management, using the blockchain to provide a sort of identity service for packages. This verified public identifier could speed up packages through customs or interactions with other postal services and private parcel delivery services.

Chief Information Security Officer and Vice President of Digital Solutions, Randy S. Miskanic, explains that “The Postal Service will continue to examine Blockchain technology in our innovation activities for identity management, supply chain management, and secure electronic communications.”

He goes on to say, however, that “we will need to be cautious in specific implementations to account for technology barriers, security concerns, and regulatory uncertainty.” These concerns are counterbalanced by the advantages of blockchain technology acknowledged in the report, including lower costs, higher speed, improved privacy, and global reach.

What do you think about the U.S. Postal Service working with blockchain technology? Would you use Postcoin? Let us know in the comments section below.

Images courtesy of USPS

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