Business 5 June 2018Erik Gibbs
Russia state-owned railway turns to crypto and the blockchain
In the wake of government approval of cryptocurrencies, Russia’s state-run railway is keeping on track toward advanced expansion in the country. Russian Railways is looking to the blockchain, as well as smart contracts and cryptocurrencies to help multiple facets of its operations.
Russian Railways, which bills itself as “the strongest link in Eurasia,” is said to be exploring the blockchain to assist with its cargo-shipping operations. A source familiar with the company said, “In view of the forthcoming adoption of the drafts, which entail the possibility to exchange digital financial assets with rubles and [foreign] currencies, OAO ‘RZD’ plans to introduce decentralized storage of data based on blockchain technology and implement ‘smart contracts.’” He added that this “could lead to full automation of RZD’s contractual relations and fulfillment of contract terms using cryptocurrency. Russian Railways intends to issue up to 5,000 smart contracts a month.”
Russian Railways is also looking to accept payments through cryptocurrency alongside cash and electronic payments. Crypto payments would provide a level of anonymity to travelers, giving them an added layer of security for their travel plans.
The ability to push forward with retail cryptocurrency and blockchain adoption in the country – as in many jurisdictions – has been the lack of government oversight. Now that it appears that Russian authorities are poised to give crypto their blessing (which could come by the end of this month), innovation will be able to move forward. Russia Railways has already indicated that it has begun to digitize records and processes in preparation of the legal adoption of the crypto space.
The company isn’t the first rail company to explore blockchain integration. State-owned Swiss Federal Railways, also known as the Schweizerische Bundesbahnen (SBB), began selling cryptocurrency to its passengers about two years ago. Passengers can purchase Bitcoin at one of around 1,000 vending machines operated by the line. The machines are offered through a partnership with Sweepay, located in Zug, often referred to as the “crypto valley of Switzerland.
While it isn’t possible to purchase SBB train tickets directly with Bitcoin, there are work-arounds. Platforms like Destinia provide the ability use cryptocurrency to purchase tickets around the world, even if the carrier does not directly accept the digital currency. Destinia has operations in the UK, France, Portugal, Spain, Belgium, Luxembourg, the Netherlands, Canada and the US.
Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.
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