One of the stupidest ideas to save the U.S. Postal Service has just come to pass: to develop a digital currency modeled on Bitcoin (https://www.bitcoin.com).
Trouble is this idea comes not from the USPS itself but the office of the USPS Inspector General which should know better https://uspsoig.gov/document/blockchain-technology-possibilities-us-postal-service.
Specifically, the Inspector General’s office is proposing that the postal service begin adopting what is known as blockchain technology, systems that reportedly will enable it to streamline and possibly even develop its own brand if digital currency tentatively named Postcoin modeled on Bitcoin.
Simply put, Blockchain technology is a system that allows entities to pay others though a new system of special digital exchanges that could potentially further automate and streamline postal service operations and international financial transactions.
Down the road, this technology might also help the postal service improve operational efficiencies by better tracking the movement of mail if not make it easier to transfer money to foreign postal authorities or banks, the report continued.
However, blockchain-based services are not regulated by any governments of anybody else and many are being investigated for possible fraud and financial improprieties. In fact this problem has grown so much that many banks are now calling for new digital technology that would create parallel systems to monitor such fraud, according to Bloomberg.com http://www.bloomberg.com/news/articles/2016-05-22/fraud-in-4-trillion-trade-finance-turns-banks-to-digital-ledger.
It’s painfully obvious that blockchain technology is way too risky for the USPS to fool with right now.
What’s more, blockchain technology and the idea of virtual currencies are barely comprehensible to the average person. So how the hell can we expect postal executives and/or employees to understand and work with this newfangled technology?
The USPSOIG did however caution that there might be regulatory and other barriers to overcome before they can be accepted, let alone adopted.
Let’s step back for a second: blockchain technology lacks paper records let alone as-yet undeveloped digital tracking systems to monitor transactions.
Even if the USPS could get this off the ground how well could the postal service handle it?
For starters, the postal service would have to stave off almost certain opposition from the financial industry which would probably foam at the mouth and lobby viciously to take over any such potentially lucrative and unaccountable system.
The Inspector General’s office came up with a much better idea in 2013 when it proposed that the postal service develop a new banking system designed to give poorer and less creditworthy individuals shunned by mainstream banks an alternative means of handling their finances https://www.uspsoig.gov/story/white-papers/examining-road-ahead-postal-financial-services#.VYGQLIVTN_M.
This banking system would also keep with the USPS’s core mission of serving the people—especially the poorer and less educated. Does anybody in positions of power or influence remember them?
Maybe the USPS won’t have to worry so much about blockchain technology if Congress got off its hindquarters and passes a postal reform bill with backing from the Republican Party, according to Government Executive http://www.govexec.com/oversight/2016/05/house-unveil-smaller-scale-postal-reform-soon/128222/?oref=relatedstories.
The as-yet to be introduced House bill would reportedly be more modest in scope than a Senate version proposed by Sen. Tom Carper (D-DE) and passed last year http://www.carper.senate.gov/public/index.cfm/pressreleases?ID=9502B56A-351E-478F-9400-A046079CF3DE.
With 2016 nearly half over and Presidential politics taking many unforeseen turns it’s doubtful if the current Congress could get its act together enough to take on new postal reform legislation in time to be acted on before the election.
Are those ideas is just as pie-in-the-sky as Postcoin?