Electronic Trade Documents Bill offers UK opportunity to be a tech leader

Six years after the Brexit referendum, the UK has recently presented the Electronic Trade Documents Bill. According to the press release “The Bill will make digital documentation legally recognised, reduce admin costs and make it easier for British firms to buy and sell internationally and processing times for electronic documents cut to 20 seconds and carbon emissions reduced by at least ten per cent.”

This is a step in the right direction, reducing trade friction can only be positive. Acceleration is next. Nationalism and protectionism is pushing the physical trade in the opposite direction but increased digitalisation can lay the fabric for cooperation. Reducing trade barriers through technology builds links through which frictionless trade may fellow.

This is where our legal framework for trade and communication needs an upgrade. If one party accepts a digital agreement, then it may encourage others to do the same otherwise the opportunity is handicapped. When governments see the bottleneck they may be encouraged to remove them. The UK bill will form a benchmark for others to follow.

As companies digitise, governments need to do the same otherwise they will be speaking a different language. The challenge is the delay. For example, in 2017 Philip Hammond, the then Chancellor of the UK announced the ‘Making Tax Digital’ project with the new legislation coming into effect from 6 April, 2024. That’s too long for a country that wants to promote the ease of doing business.

The UK has a unique opportunity to become a technology leader and rebuild its legacy systems with a data first strategy. New technologies like blockchain hold the key.

Blockchain technology can provide transparency and therefore trust between business and the government entities. Here the blockchain can be used as a private permissioned framework for the closed group of stakeholders and manage transactions dynamically. Blockchains are immutable, ensuring that each transaction can be evidenced.

New blockchain powered databases can help governments transition to a digital foundation and a new operating model. Blockchain technology, because of its decentralised nature enables data to become the foundation of all government processes, connecting digital transformation of enterprises with that of government requirements and processes. The biggest opportunity is to accelerate the communication between government and businesses through real-time bridges. Multiple points of connection can ensure red tape is removed – and replaced by contact and communication, accelerating business processes.

These benefits could be applied to multiple use cases including transaction proof and record keeping applied to land registry, tax, welfare state and health records. By applying Blockchain’s capability to be programmed and automate the execution of the outcomes, governments can manage approvals once applications are approved. This speeds up the process, reduces cost and improves productivity – a tonic in times of rising costs and falling budgets.

The recent Building Safety Act went close to naming blockchain by describing the characteristics required to create a living will to ensure long term knowledge and understanding of the construction and management process for buildings.  

BS8644, the British Standard to provide a digital ‘golden thread’ of fire safety information is pioneering. This aims to produce a single document, in the form of a code of practice, that manages the flow and presentation of information relevant to fire safety so that it remains accessible and useable by all parties, throughout the lifetime of the building.

Recording of the ‘relevant events, that led to and encapsulated the construction activity prior to demise of Grenfell Tower, could have led to a very different outcome.’ Would we have had a different outcome, if we knew the makeup of the tower and its fire-resistant capabilities? Undoubtably yes.

When regulation meets technology, adoption is accelerated. However, where regulation requirements fail to match technology capability the process can stall and even spook the markets (consider the mini budget announcement of the unfunded tax cuts!). Fortunately, the technology required by the industry exists today, Blockchain.

Applying the right technology can improve productivity and, in some cases, save lives. Countries like China know this and have been investing heavily in R&D in areas including Blockchain.

In 2019, President Xi, The Chinese leader said Blockchain was an “important breakthrough in independent innovation of core technologies” and that China should “seize the opportunities” presented by Blockchain technology. China has been building a platform to enable the deployment of blockchain technology for enterprise called ‘Blockchain-based Service Network.’ There is an opportunity for platforms that accelerate Blockchain adoption (see Finboot’s Marco) whose low-code / no-code platform creates a plug-and-play blockchain capability that is also works with any blockchain.

Blockchains create most value when they are used to connect and communicate across different stakeholders. The same could be said for global trade and the reduction of friction. Combining the two could yield benefits that may even form the growth coalition.