USPS report explores potential postal blockchain applications

United States Postal Service (USPS) headquarters at L’Enfant Plaza in Washington, D.C. It was designed by architect Vlastimil Koubek.

The U.S. Postal Service (USPS) Monday released a report that outlines prospective areas in which it could leverage blockchain technology.

The USPS Office of the Inspector General said it contracted with Swiss Economics, a consulting service, in an effort to better understand blockchain’s features and capabilities, as well as to determine possible areas of interest for the USPS.

Following a primer on blockchain, the report explores four potential postal blockchain applications.

Financial Services

Currently, the USPS offers some basic financial services, such as global electronic money transfers. Swiss Economics suggests using blockchain technology, through the formation of a financial platform dubbed Postcoin, to offer cheaper and more efficient financial services. USPS could serve as an intermediary to ensure Postcoin is fair, affordable and transparent, offering access and assistance online, through a mobile app and in person.

The creation of the Postcoin platform could take two varying paths, the report says; one is to “buy in” to an existing, public blockchain, the other would be to develop a brand new blockchain altogether.

Although the Postal Service could create its own platform, Postcoin would be strongest as an international postal money transfer and payment platform, suggests the report. Given that a global Postcoin system would require national postal operators to interoperate, the Universal Postal Union would be well-positioned to serve as the governance body for such a platform.

Identity Services

The report says a verified digital ID would allow USPS users to know the peers with whom they are interacting are real and have proof of ownership. The Postal Service could confirm IDs in person at a post office by using an ID card or a biometric identifier. It could further connect that virtual ID used by the customer within a blockchain system with real-world identifier, like an individual’s mailing address. Customers could use these verified IDs to log into secure websites, notarize documents or take part in smart contracts.

Device Management

The report suggests the USPS could leverage the blockchain to develop and manage an “Internet of Postal Things” at a lower cost compared to conventional, centralized methods. Blockchain-enabled device management could help bolster security of the network by eliminating risks associated with single points of access, strengthen the ability of devices to actually act upon the data they collect and slash infrastructure and maintenance costs of managing the whole system and boost its efficiency.

Supply Chain Management

The USPS could use blockchain technology to ID mail pieces in the same way people can be identified, speeding up shipments, in particular international ones.

The report envisions a scenario in which every letter or parcel has an embedded sensor that keeps track of its own chain of custody while executing contracts for payment and customs clearance. Each piece of mail could be uniquely identified on a blockchain and able to create transactions, allowing for the timely sharing of data and processing of payments.

While the report notes a prohibitive cost right now to tag each mail piece with a sensor, it says it may be possible for the USPS to apply blockchain initially to high-value shipments in an early adoption stage, then depend on downward pressure on the expense of sensors to widen the feasibility of broader use over time.

The report concludes the USPS could benefit from blockchain technology in the short term by investigating the technology and possibly experimenting with blockchain-powered solutions for financial services. Over time, the Postal Service’s experience with and exploration of the technology could naturally expand into the other areas assessed in the report. Because blockchain technology is likely to be a disruptor in aspects of the USPS’s business, the report notes, keeping an eye on the development of this technology and starting to experiment with its potential applications could benefit operations and customers.

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