Written with Megan Hughes
The U.S. Postal Service Inspector General’s office is looking at disruptive technologies to bolster the finances of the nation’s ailing post offices. The latest idea? Jump on the Bitcoin bandwagon.
Possibilities include putting Bitcoin ATMs in some of the 35,000 post offices around the country or offering electronic wallets – either virtual or physical – where people could store their Bitcoins. The agency wouldn’t be involved in the technical side of Bitcoin, yet could be a brick-and-mortar stop for the authentication or redemption of the virtual currenci.
In many ways this idea makes sense: USPS already offers several financial products, including money orders (they have 70 percent of the domestic market), prepaid debit cards and an electronic money transfer service to nine Latin American countries called Dinero Seguro, which means secure money.
They also have the trust of the public. A 2013 report by The Ponemon Institute ranks USPS as the fourth most-trusted company when it comes to privacy. And trust could be key when it comes to Bitcoin.
The Post Office also can reach communities under-served by banks. Because of its universal service mandate, 38 percent of post offices are in zip codes that have no bank branches. Those could provide valuable new customers in order for a currency to go mainstream.
But can a currency still in its infancy save a Postal Service teetering on the edge? Since 2006, USPS has lost $41 billion and is approaching its debt ceiling of $15 billion.
Researchers from the USPS IG’s office say implementing a plan for its role in virtual currencies would be at least three years away and questions abound.
Would it need congressional approval? While the law doesn’t specify any authority regarding virtual currencies, the argument could be made that these are ancillary to their existing financial services offerings, according to the researchers. Any plan would, however, have to be approved by the Postal Regulatory Commission.
Perhaps the biggest question the researchers will need to answer: Does it make economic sense for the Postal Service to get involved? R
Researchers admit at this point that they don’t have an estimate of how much the market would allow them to charge for these services, or whether the mainstream market will be there at all. Even if it is, part of the appeal of Bitcoin for many is the lack of transaction fees. On the other hand, perhaps Bitcoin users would be willing to pay for the ease, convenience and trust of their local post office.