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Blockchain technology could be the solution for border trade

A road sign close to the border (stock photo)
A road sign close to the border (stock photo)

By Jamie Harris and Ben Chu

The Irish border remains a contentious issue for the Government as it tries to find a suitable remedy to the backstop, but technology has long been touted as a possible solution.

Last year Chancellor Philip Hammond indicated blockchain technology could be used. Initially created as the infrastructure for decentralised cryptocurrencies, it is effectively a digital list of records or transactions that are linked together in a public database.

Advocates of blockchain have long argued it could work by monitoring goods moving across the border in a non-disruptive way that would not breach the Good Friday Agreement.

Blockchain would do this by digitally recording goods transparently and would be updated by those using it.

Andrew Bird, chief executive of digital transformation firm GS Marketplace, said: "In our opinion, the Northern Ireland border issue is a non-issue if you use technology. The whole thing just ceases to be a problem.

"But someone needs to define what you want the border to look like - is it checking everything? I doubt it - that's against the Good Friday Agreement.

"If it's maintaining the current level of rigour, which I would assume is going to be acceptable, then absolutely blockchain could do this relatively quickly."

Mr Bird said scanning devices could be used, saving drivers from needing to get out of their truck.

Critics of blockchain have described it as a "wild card" because they believe no one really understands it.

"If there are wonderful technologies that make borders near frictionless, why aren't they being used elsewhere - or where are they being used?" asked Professor Vili Lehdonvirta, associate professor at the University of Oxford's Internet Institute.

"If we're talking about a world-first, especially at some kind of an accelerated, break-neck speed, the chances of failure seem very high, considering the track record of the UK government in large IT projects."

Another alternative being discussed is the Malthouse compromise, a proposal put together by Tory MPs from both wings of the party. It refers to a "protocol" replacing the backstop.

This offers various technological and procedural measures - including customs checks away from the border and a new regime of regulatory equivalence between the UK and EU - which would supposedly eliminate new frictions on the border as a result of the UK leaving the EU customs union and single market.

But Dr Katy Hayward, of Queen's University, Belfast, said its provisions for policing and preventing smuggling would not be secure.

"(Its) 'self-assessment' and 'periodic declarations' simply do not provide data that is substantive enough for managing movement of goods between different customs and regulatory regimes," she said.

"Secondly, computerised risk analysis without the means of intervention is pointless."

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