South Korea’s national postal service Korea Post is planning to apply blockchain technology to its billing system, local news agency News1 Korea reports on June 5.

The initiative is a collaboration between the South Korean government and local private companies including blockchain firm Coinplug global and IT company NHN.

According to the report, South Korean authorities will grant project participants 800 million won ($677,000) in order to support the initiative.

Operating under the authority of the Ministry of Science and ICT, the Korea Post will build a blockchain-powered payment method incorporated in its postal service, using the blockchain expertise of Coinplug and NHN's payment technology.

The pilot project will reportedly launch in the city of Naju, which received the title of "Innovative City" and has attracted a number of public offices to move from Seoul.

The postal service is also considering to apply blockchain technology to overseas remittances, the report notes.

Founded in June 2013, Coinplug is a South Korea-based blockchain company offering cryptocurrency exchange and wallet services, as well as enterprise solutions. The firm was reportedly set up by South Korean and Silicon Valley engineers, and targets the Korean and Asian market.

As a part of the collaborative project with Korea Post, Coinplug will work with its technical partner Metadium to enable a blockchain-based payment solution, as well as an authentication system, a Coinplug spokesperson told Cointelegraph.

Recently, the South Korean Ministry of Science and ICT announced that the agency will conduct a follow-up study on blockchain regulations. Entitled “Blockchain Regulation Improvement Study Group,” the study intends to find out how regulations can be improved in order to embrace the benefits of the technology and to bring it to mass adoption.