The most recent news about Bitcoins is that the United States Postal Service might get into Bitcoins. Although it is quite unusual, this is something that they are really looking at. Recently, an online forum on Reddit started discussion on this. So, how would this decision change Bitcoin world?
The researchers at the U.S Postal Service Inspector General’s office are working on a white paper to start Bitcoin services at their offices. The Postal Service is already involved with services like the money orders, money transfers and prepaid debit cards. So, this would really be the next frontier for them. And some of the reasons they think they are positioned to do this is that they’ve got a brand that people trust, they’ve got nationwide reach and they’ve got 36,000 different offices where people will be able to walk in, get their bitcoins into their digital wallets and potentially even withdraw some of Bitcoins. They also have a money transfer license. Those are pretty coveted and difficult for startups to get and this is what gives them an edge.
Will this regulate the Bitcoin market? There would obviously be a lot of concerns about the potential regulation, especially after we’ve seen the state of New York planning to regulate Bitcoin usage. But, this would have to go through a lot of internal hurdles. So, we are talking about a few years out. The researchers are hoping that at that point there will be harmonization and a federal regulation in place, instead of a patchwork of different state laws. Most of Bitcoin investors are in the market for governmental independence. It will be worthwhile to see how such investors would cope with the regulation the USPS brings.
Another major aspect of Bitcoins that the USPS would have to consider is their low transaction costs. Bitcoins are preferred for their low transaction costs, but any USPS service would mean an additional handling fee. This adds to the transaction charges and it is not yet clear if Bitcoiners are ready to take such a rise in transaction costs though they are growing accustomed to these fees as exchanges such as coinbase.com also charge a very reasonable premium on most transactions.
Although the above drawbacks, the USPS adopting Bitcoins is beneficial in many ways. The USPS has a widespread international reach and trust amongst customers. Setting up Bitcoin exchanges in USPS offices would offer Bitcoins a lot of trust and would widely spread the use of this virtual currency all over the world. This increased popularity would increase both demand and trust, thus expanding Bitcoin network further.
Furthermore, the USPS website can offer a one stop solution for a lot of international e-commerce problems such as security, risk and international transfer fee. Since, all transactions will happen through the post office, Bitcoins would become a more trusted and viable option for many international shoppers.
If USPS, dealing with its own set of financial issues, can actually come forward and set-up Bitcoin Exchanges at its offices it would certainly be something to look forward to!