How Blockchain and Cryptocurrencies can Solve Some of the Most Notable Problems Associated with Brexit
This article will take you to an amazing journey by seamlessly letting you know what Brexit is, why is it so important for the UK and Europe, and how all the issues have now shaped up in the UK. Then, it will show you some most notable problems in terms of economies and businesses in the UK due to this sudden political dis-assimilation of the UK from the European Union. The most notable part of this write-up is how Blockchain and Cryptocurrencies that have not been given due importance have the keys to solve the economic and business dilemmas arising out of the Brexit issue. For all Brexit minders, it’s a must read!
You must have already heard about Brexit, a term that is composed of Britain and Exit that commemorates Britain or the United Kingdom’s exit from the European Union bloc. The European Union (EU) is an economic and political partnership involving 28 European countries that was built with a view to abandoning hostilities of war among the European nations as it was then believed that countries that trade together do not engage in war within themselves.
There is a common treaty within EU that allows a ‘single market’ to be formed in which goods and people could move around freely as if they were moving inside one single country. There is also a currency, known as Euro that is approved by 19 member countries and usable in the entire EU, making it possible for people and goods in the entire union to be moved without any special inconvenience while making payments and all other financial transactions in the EU.
The EU was formally established with the Maastricht Treaty being applied from 1 November 1993. While everything seemed fine and working well, there was a special section, called Article 50, in the EU constitution that left an opportunity for the member countries to exit the union if they wanted to do so. It was formally signed in 2009 via the Lisbon Treaty.
Now, The UK Independence Party (UKIP) which is a prominent political party in the UK saw some real issues for the UK if it remained part of the EU. Their main accusation was that Britain was being held back by the rules of the EU that imposed too many rules on business and charged completely unacceptable billions of pounds each year as fees for being a member of the union but Britain in return got nothing substantial. The party started campaigning for the independent UK with its own laws again, without being tied by the EU norms in an aim to become a more vibrant and economically stronger country.
With the ideology of the UKIP gaining momentum, a vote was carried out in Britain to see what the citizens of the UK wanted. A referendum popularly called the Brexit vote was held on Thursday 23 June 2016, to decide the fate of UK — whether it should leave or remain in the EU. Leave won by getting the support of 51.9% in the vote where the turnout was 71.8% of the total UK population, and where about 30 million people voted their intentions.
With the Leave option being the winner, the issue of Britain exiting the EU became apparent, but not without a lot of repercussions. While Brexit became a choice, leaving the EU, of which the UK was an important part for more than 8 years, and where there were many rules to be followed, the issue led to creation of a lot of political, economic, scientific, geographic and social problems which became burning issues for Britain and some of its neighboring countries, if not for all members of the European Union.
While the number of issues that need a solution before Britain could leave the EU peacefully and without making too many broken economic and business bonds in the EU region at 11 pm UK time on Friday 29 March 2019 are countless, many of the issues seemed impossible to solve in one go due to the restriction of treaties and the current form of politics and economics existing in the region.
While it is none of any wise idea to address all the issues here because that would probably be an encyclopedia of Brexit no one is interested to learn once again, we thought to provide some clues on some of the most potential and notable problems that could get easier and more frictionless with the use of Blockchain and cryptocurrencies.
This might seem to be an idea of pushing the ‘doubtful’ idea of cryptocurrencies forward in the times of urgent need, but we can assure that this article is written with a holistic approach to mitigating the negative issues existing in the EU geography rather than including Blockchain and Cryptocurrencies in a massive geopolitical problem with an aim to make the cryptocurrencies more acceptable.
Keeping the Economies Vibrant and Frictionless
The type of trade deal Britain secures with the European Union once Brexit takes place is of very high importance for the UK, and it is easy to see why. The National Institute for Economic and Social Research (NIESR) suggests after a thorough study of the situation that leaving the single market could cost UK a loss of 22% and 30% business with EU. To get rid of the problem, there is only one option in Britain’s hand — it must sign exactly the same free trade deal as it has now (which is not supported by many).
The main point to note here is that the ‘single market’ idea not only reduces the tariff barriers within the EU, which is the UK’s largest export market but it also diminishes the “non-tariff barriers”, the rules and regulations that govern important issues, including safety certification and licensing of goods and services provided across borders.
Britain being heavily reliant on retail and finance, the non-tariff barriers are keys to its wellbeing following Brexit. While some argue that new Free Trade agreements with countries such as the US and Canada can solve the issue, that will need time to happen. However, the most notable point is that Free Trade is an unavoidable idea for the UK if it has to remain an economically progressive country in Europe.
That being said, the other notable point in this discussion is that, regarding the border and Free Trade issue, in economic terms, the more “frictionless” the relationship of UK with other nations, the better it is. This is where Blockchain and Cryptocurrencies could make an impact. It is known to all analysts who deal with Blockchain that it is a technology that preaches more inclusion by making economic transactions less dependent on geographical identities and markers in an aim to create a global single market.
The use of Cryptocurrencies could play a pivotal role for the UK in making its intentions to forge more Free Trade agreements an easier and convenient process by making the issues of local currencies less significant for payments of goods and services. While it is true that the actual process of movement of goods and services across the borders would need political and economic surveillance, if the ultimate tool that manages the entire process — the payment, is made completely virtual by the use of Blockchain and Cryptocurrency, a lot of issues related with cross-border trade could become a matter of just political will, and that is desirable.
Keeping Businesses Ticking once Brexit occurs
In regard to businesses occurring in the UK, the most important and influential business concern is the failure to agree on a trade deal on preferential terms with the EU for goods and services. Although there is an option of two years to bring all business processes to normal after Brexit occurs, this time frame is either too small or is impossible for all UK businesses to make things work on their own.
There are some notable points in some select industries in the UK. For example, the automobile industry relies on a Europe-wide supply chain which could be impacted heavily due to cross-border tariffs after Brexit. Moreover, the financial services of the UK are concentrated in London which can become physically impossible to keep the balance after Brexit.
There are some other concerns too, but with an aim to show some positive sides, let’s check what Blockchain and Cryptocurrencies can do to solve these above-mentioned two issues.
First, use of Blockchain can bring a much-needed uniformity in the industries that are spread Europe-wide. For example, in case of the supply chain issue for the automobile industry, the use of Blockchain could mean that the transaction part of the issue becomes less geography-oriented. That is, even if there are some tariffs that tend to limit the UK’s prosperity due to cross-border taxes, Blockchain can bring all of the industry on to a single platform in which, the parties engaging in trade will have to reduce the costs to remain competitive in the global scale.
In other words, the EU must bring the tariffs (and costs) of cross-border movements of goods and services down because the Blockchain will eventually make the entire European geography a ‘single market’ in principle. In case a problem with the currencies arise, which is very probable because the EU and the UK will become two different political identities, the cryptocurrencies can solve the issue. As cryptocurrencies have nothing to do with political identities, they can make the flow of transactions and thereby the flow of goods and services seamless once again.
As far as the financial prudence of Europe’s financial hub, London, is concerned, taking the Cryptocurrency route could make the issue of geographical presence a matter of past. So, even if the financial elite, London, stays a part of the UK, the policies regarding financial inclusion could be applied everywhere in Europe by taking the route of Blockchain and cryptocurrencies. In other words, cryptocurrency-use can keep London’s pride and potential the same even when the financial prudence is distributed all across Europe.
Therefore, it is of utmost importance that the authorities dealing with the issue of Brexit take the Blockchain technology and use of cryptocurrencies seriously. For the rest of the political and social issues, what we need is a more humane approach to politics rather than a tough stance based on the identities of the residents. For the time being, let’s leave that to the people of UK and EU rather than using the Blockchain because to solve the social issues, the need of a humane will is more important than lifeless technologies.
For rest of the economic and business problems, count us, the Cryptocurrency geniuses, anytime you wish!
Sincerely yours,
