Russian bank Sberbank is partnering with S7 Airlines to create instant settlement for ticketing based on cryptocurrency assets and blockchain smart contracts, Cointelegraph reports today.
Helen Partz reports this system will be the first use of its kind within the Russian economy, in which blockchain systems can streamline the process of selling seats on an airplane.
The change would also usher in a surprising expedition of transaction settlement – Partz reports an estimate that settlement time will go from around 10 days to 20 seconds.
How does this work? Many of the massive efficiencies built into new blockchain ledgers have to do with instant verification. Rather than spending days underwriting assets, banks and counterparties can just digitally verify crypto collateral in, well, something like 20 seconds.
It’s not hard to see the value of the blockchain when looking at these types of metrics. But beyond transaction speed, the Sberbank/S7 Airlines deal can also allow Russia to burnish its reputation as a world leader in decentralized finance.
For example, although a similar system seems to be nonexistent in the United States, an entity called Alternative Airlines allows flyers to use cryptocurrencies to buy tickets for a range of American and British airlines, as well as others. By moving to direct blockchain ticket handling, Russia is grabbing the window seat. Putin and crew are probably hoping that this, plus Russia’s recent announcement of a ground-breaking “Sputnik” coronavirus vaccine, give Russia a new rep for innovation and trail-blazing in the new tech era.
The move toward cryptocurrency airline ticketing complements other new innovations like in-flight Wi-Fi, smart monitoring of luggage, and much more that will allow airlines to personalize and monitor flight operations. It also adds to the use cases for digital assets that are quickly becoming popularized as value stores.
As for Sberbank, Partz also reports that the Russian finance firm is considering creating a stablecoin pegged to the Russian ruble.