When asked to describe the UK government’s plans on how to reach a frictionless trade deal with Ireland post-Brexit, finance minister Philip Hammond was quick to cite blockchain technology as a potential solution.
The British finance minister, Philip Hammond, has states that blockchain technology can help settle the issue of trade across the Irish border.
“There is technology becoming available […] I don’t claim to be an expert on it, but the most obvious technology is blockchain,” Hammond answered in the British parliament when asked how the government plans to achieve frictionless trade after Brexit.
While the EU and the UK are both in agreement that the border between Northern Ireland and the Republic of Ireland should be left open, they are still uncertain of how that could logistically be made a reality.
Dublin will continue to insist, and whether there is a “hard” Brexit or a “no-deal” Brexit, the border remains open – which is entirely understandable considering the political emotions a patrolled border might stir, not to mention the extent to which the Republic of Ireland relies on trade with the UK.
Can blockchain make a Brexit deal happen?
The UK accounts of 16% of Irish exports and 39% of its imports – barriers to trade could severely harm both sides. Ultimately, the view on both sides is that in the absence of a deal, some system of regulatory alignment should be set to go into force between the Republic of Ireland and Northern Ireland.
That is where blockchain technology could come in, to ensure the existence of regulatory stability across that border. Blockchain technology could be used to facilitate multiple transactions being made across the border, rather than relying on current platforms or actual physical records. The technology would allow for transactions to be recorded transparently, as we have seen from Accenture’s efforts to apply blockchain to shipping, as well as Australia’s Commonwealth Bank initiative to track the shipment of almonds to Europe.
Building and then implementing a customs system based on blockchain technology would be costly and time consuming for all parties involved. However, such a customs system could serve as an essential fall back in the event that the UK and the EU have not reached an effective agreement by 2019.