Even though Russia has had an unstable relationship with crypto, this has not stopped other industries from giving blockchain technologies a chance.
The country’s largest state-owned bank has partnered with a major airline in a push to sell passenger tickets for tokens.
S7 – Russia’s largest airline after Aeroflot – recently announced a partnership with Sberbank to experiment with blockchain-powered monetary transactions for the purchase and sale of its flight tickets.
According to Sberbank board vice president Anatoly Popov, the bank developed a technology which “allows any company to develop its own blockchain applications and create smart contracts.” This infrastructure is used by S7 to handle its ticket sales, cutting down the processing time of a standard procedure (letters, reconciliation, funds transfer, etc.) from 10 days to 20 seconds.
S7’s initial investment in the project was around half a million dollars. Still, the airline has been involved with blockchain technologies for quite some time. Already in July 2017, S7 made the first sale of air tickets through a blockchain, and in 2019, processed sales using distributed-ledger tech exceeded $1 million.
The increasing efficiency led S7 to publicly recognize its interest in developing smart contracts to evolve its way of doing business and provide a better customer experience. The words of Pavel Ryazanov, Director of Transaction Business at Alfa-Bank, could not be more clear:
“The good results of our project with S7 Airlines shows that blockchain technology creates value and is largely decisive for the B2B market. Agents left behind the guarantees and deposits, reduced transaction costs and now can make payments 24/7. We see great potential in the use of smart contracts and external business logic in accounting and paperwork in various sectors of the economy. Alfa-Bank will continue going in this direction with S7 Airlines.”
However, it is still too early to talk about a revolution in the travel industry. The blockchain technology “so far is available, rather, for the big players, as it requires an investment at the beginning,” said Mikhail Burmistrov, general director of Infoline-Analytics.
All of this happens despite the fact that President Vladimir Putin recently signed bill outlawing cryptocurrencies as a means of payment.
This article was first published on: Aug 26, 2020