Chancellor says blockchain could ease post-Brexit trade conundrum
Philip Hammond, UK’s chancellor of the exchequer, believes blockchain may be the solution for maintaining frictionless trade if Britain’s exit from the European Union is finalised without a trade deal.
The finance minister gave no details on his thinking – likely preferring to leave the details to the experts – but he was obviously aware that many trials and experiments involving blockchain’s distributed ledger technology have been focused on supply chain economics and trade finance.
Hammond was asked, at the Conservative Party conference in Birmingham, how Britain could achieve seamless post-Brexit trade.
He replied: “There is technology becoming available. I don’t claim to be an expert on it but the most obvious technology is blockchain.”
While the major concerns over leaving the EU without a trade deal are related to the added costs to British industry, blockchain trials have been shown to significantly reduce the time it takes to complete an international trade transaction.
Several trials of cross-border trade using blockchain technology have been conducted by banking institutions and consortiums over the past months.
Blockchain trade trials
Among the most successful was Commonwealth Bank of Austrailia (CBA), whose blockchain platform was used in July to document the supply of a shipment of almonds, all the way from the grower in Victoria state, through transportation by road to loading on to a ship, to delivery in Hamburg.
Each stage was carefully documented on the distributed ledger, so financiers and shippers could trace the transaction from start to finish.
“We believe that blockchain can help our partners reduce the burden of administration on their businesses and enable them to deliver best-in-class services to their customers,” said CBA’s logistics director Chris Scougall at the time.
Similar trials have conducted by we.trade, a consortium of banks led by Britain’s HSBC, that completed a round of trade finance transactions on IBM’s blockchain network, also in July.