Russian Railways planning crypto-related innovations

Russian Railways planning crypto-related innovations Photo: Artem Svetlov

While the Russian government is working on legislation that will legalise the crypto industry in the country, businesses are getting ready to use cryptocurrencies and related technologies in daily operations. State-owned railway company RZD is going to implement blockchain applications, smart contracts and ticket sales in crypto.

Russian Railways (RZD) is seriously considering embracing crypto-related applications, such as smart contracts and blockchain technologies, and may even start selling tickets for cryptocurrency, says Bitcoin.com. The adoption of these innovations by such a large-scale enterprise would be a significant step forward for the Russian crypto sector that is currently constrained by the lack of regulation. However, the situation is set to change soon, as the State Duma has approved bills ''On Digital Financial Assets'', ''On Attracting Investments Using Investment Platforms'' and ''On Digital Rights'' on first reading. The final adoption of the laws designed to legalise the crypto industry in the country is expected by the end of June.

According to independent IT expert Pavel Terentyev, RZD plans to introduce decentralised storage of data based on blockchain technology and implement «smart contracts» (computer protocols intended to digitally facilitate the negotiation or performance of a contract). He considers that this could lead to full automation of the company's contractual relations and fulfilment of contract terms using cryptocurrency. Crypto payments can be used in passenger travel as an alternative to traditional payment methods like cash and electronic transfers, said the expert. RZD also aims to use blockchain technology to store information related to cargo transportation, which can significantly reduce the cost of the carrier's logistics services.

Russian Railways aims to reduce the cost of its logistics services by using blockchain technology. Photo: Artem Svetlov

The company's top officials have already mentioned plans to transit to crypto. For example, Head of RZD's IT department Evgeniy Charkin, said in March that Russian Railways intended to implement blockchain technology, smart contracts and to start using cryptocurrency in its accounting after the relevant legislation was adopted. The company's Director General Oleg Belozyorov also confirmed digitising many of the company's processes. The implementation of blockchain technologies would ensure cheaper transportation, he stated at the Gaidar Forum in January.

In many countries, train tickets already can be paid in cryptocurrencies by means of platforms like Destinia. The service currently offers tickets for the railway systems of Spain, Italy, Belgium, Luxembourg, the Netherlands, the UK, France, Portugal, Canada and the US regardless of whether the companies accept digital coins or not. Moreover, in Swiss the state-owned carrier offers cryptocurrency to its passengers via ticket vending machines and even informs travellers about locations accepting bitcoin on its website.

Anna Litvina