New UPU study decodes blockchain’s benefits for the Post
The UPU’s newest study, Blockchains for a Sustainable Postal Future, made possible by funding from the government of Japan, highlights two domains for DLTs: logistics and inclusive financial services. Findings were shared in a virtual event attended by more than 200 participants from 100 member countries on 28 April.
The UPU’s Financial Inclusion team launched its latest innovation-focused study on the use of blockchains and distributed ledger technologies (DLTs) during the virtual event. The study intends to provide guidance to postal operators that are thinking of piloting or implementing blockchain based technologies in their operations.
“DLTs can ensure integrity and reliability of data, as well as resilience of systems through secure transactions on distributed P2P networks,” said Yoritaka Naito, Director of the Ministry of Internal Affairs and Communications for the government of Japan. “As a network industry, the postal sector should be one of the most promising areas where DLTs can be applied as appropriate.”
Interest in blockchain and other distributed ledger technologies (DLTs) has continued to grow with more posts exploring the role DLTs may have in their digital growth.
Austrian Post was a world leader with its release of the first-ever Crypto Stamp in 2019. For Austrian Post’s philately department, turning to blockchain was a matter of maintaining relevance in a changing world.
“The focus was, how can we survive this decreasing market,” said Patricia Liebermann, Head of Philately of Austrian Post. “It was the right decision because now we are in a growing market, and the philately sector became the expert in our entity for blockchain projects and blockchain-related activities.”
Despite challenges in the early uptake of DLTs, a decentralized solution has the potential to benefit posts and communities, the UPU study explains.
Given the Post’s high regard, DLTs could have a positive impact on unbanked and underbanked populations that have been excluded from formal financial systems, according to the study’s executive summary.
DLTs could be used in collective insurance, digital wallet, identity management, managing direct cash transfer projects, P2G payments, remittances, and transaction information management.
Additionally, DLTs may benefits logistics with increased transparency of data shared between stakeholders, as well as an added layer of cybersecurity.
Partnerships with global payment platforms, such as Visa, can help posts prepare to accept cryptocurrencies and Central Bank Digital Currency for their services. Visa partners with more than 60 crypto players and platforms globally, and its cards make conversion and spending of cryptocurrencies seamless so that posts don’t have to accept cryptocurrencies directly.
“What we’ve learned over time is the value of partnerships and networks,” said Maike Hornung, Europe Crypto & Global CBDC Strategy Lead for Visa. “Especially if there is a newly evolving technology, posts can really help to introduce these innovations to populations as they did with the telegraph, the telephone and money transfers.”
Posts can also play a critical role in the circular economy, promoting a sustainable way of living and a new paradigm for our economies. In this respect, DLTs can play a role for Posts to be an integral part of the sustainable economy.
“Over the last few years, startup companies have focused on the sustainable, circular economy that aim to reduce waste. They are thinking hard and loud on how you can bring in the postal services,” said Günther Dobrauz-Saldapenna, Partner at PwC Legal Switzerland. “You can create new postal packaging that are sustainable, but will still need to stamp it for delivery. This is exactly the kind of area where DLT and blockchain technologies are creating new ideas that can help overcome traditional challenges,” he added.
In the coming months, the UPU will publish detailed case studies and pilot “blockchain blueprints” to help posts learn and implement financial inclusion solutions via DLTs.