Jun 4, 2018 09:39 UTC
Jun 4, 2018 at 09:39 UTC
Crypto and Blockchain on the Right Track in Russia
Russia is upping its technology game and the world is watching with bated breath. The state-owned giant RZD, which is a Railway Company, is embracing technological advances brought about by cryptocurrencies like Bitcoin. Russian Railways is planning to implement blockchain applications, smart contracts and ticket sales in crypto. Both company officials and independent experts have justified the use of crypto for better logistics and transportation services.
RZD is seriously considering using crypto-related applications such as smart contracts and the blockchain technology, and may even start selling tickets in cryptocurrency. Russian Railways, which is proudly calling itself “The Strongest Link in Eurasia,” is among the top three railway systems in the world. The adoption of these innovations by RZD would be a huge boost for the Russian crypto sector.
The only obstacle is the lack of regulations but that is about to change soon. The State Duma, the lower house of Russia’s parliament, have provided their support on first reading, to three draft laws aimed at legalizing the crypto industry in the country. The bills – “On Digital Financial Assets,” “On Attracting Investments Using Investment Platforms” and “On Digital Rights” were presented on the house floor last week and should be adopted by the end of June.
“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’,” said Pavel Tarentyev, an independent IT expert.
Tarentyev further explained that this could lead to full automation of RZD’s contractual relations and fulfilment of contract terms using cryptocurrency. Russian Railways intends to issue up to 5,000 smart contracts a month, he added.
Cryptocurrency could emerge as an alternative to traditional payment methods, like cash and electronic transfers since decentralized data storage would provide anonymity to passengers and their travel plans, according to Pavel. RZD also hopes to use blockchain technology to store important information related to cargo transportation and drastically reduce the cost of its logistics services.
The head of RZD’s IT department, Evgeniy Charkin, said in March, that Russian Railways intends to implement blockchain technology, smart contracts and start using cryptocurrency in its accounting after the relevant legislation is adopted. And, according to Director General Oleg Belozerov, the company has already begun digitizing many processes. During the Gaidar Forum in January, he expressed hope that the implementation of blockchain technologies would reduce the cost of transportation.