Video Transcript

BRIAN MCGLEENON: On this week's episode of Yahoo Finance's "The Crypto Mile," we are joined by Lord Chris Holmes. Lord Holmes is the architect of the UK government's New Electronic Trade Documents Act. The act promises to digitize the mountains of legacy paper that currently are being used for domestic and international trade. Lord Holmes calls it the most important law that you've never heard of.

Lord Holmes, welcome to "The Crypto Mile."

LORD CHRIS HOLMES: Great to be here. Thank you for having me.

BRIAN MCGLEENON: So the Electronic Trade Documents Act was granted royal assent in July. Why do we need this? If the system's not broken, why fix it?

LORD CHRIS HOLMES: We've had the same system in trade for centuries now, and if not broken, it is certainly clogged up with billions of bits of paper and there are issues of lack of security, lack of efficiency, and we're missing out on billions of economic and environmental opportunities. That's why the Electronic Trade Documents Act brings in a whole new epoch for international trade with benefits for everyone. It's why we need to communicate and keep communicating that this act is now in force, available to all those who wish to engage in trade.

BRIAN MCGLEENON: So is the UK leading the way with this, or have other countries, you know, done this before, or are they going to follow suit?

LORD CHRIS HOLMES: The UK'S leading the way with the Electronic Trade Documents Act. Singapore passed a similar piece of legislation, but the UK is the first G7 nation to pass such an act. And why it's critically important is that we have that great good fortune of common law, and 80% of bills of lading, those critical trade documents 80% of them are created under English law. That just gives a start which brings the scale of the issue right into focus.

BRIAN MCGLEENON: OK, so this could have reverberations around the world because there's a lot of like trade organizations and trade that use documents in this way.

LORD CHRIS HOLMES: The act needs to, and will, have a transformational impact on trade. If you imagine, particularly for small and medium-sized businesses, this could be the difference between them being able to engage in importing and exporting, making that possible for the first time saving individual businesses thousands, grows that up and saving trade billions.

BRIAN MCGLEENON: What kind of hurdles did you have to overcome to get this through? I'm sure there were a lot of years of-- did you have to wait for the technology to catch up with the concept?

LORD CHRIS HOLMES: The largest hurdle to pass such a piece of legislation as this is to make the intangible possessable. And that is critical piece of English law. And exactly to your point, that's only possible now because we have the technology, which enables an electronic document to prove that it's the only version of that document, which enables me, for example, to say, I hold that document, there's only one document, I can show that I possess it. I can show no one else possesses it. And as a result of that, I possess that electronic document, thus I possess the goods.

BRIAN MCGLEENON: So presumably this what you've done is a precedent, and all the legal case has been made now. And because it's now a law, it's going to be easier to digitize other areas of administration.

LORD CHRIS HOLMES: What's great about this law is, as I mentioned, because it's in our fabulous common law tradition precedent, i.e. case law, can flow from that so it can develop in this common law context that we have. But there are tens, hundreds of examples where we could use innovative new technologies to transform what the state does, to transform how we interact with the state. Nothing short really of potentially being able to completely reconstruct that social contract between citizens.

BRIAN MCGLEENON: So this is a very important milestone Thank you, Chris. The act has come into force. So businesses can actually start to change their processes as we speak?

LORD CHRIS HOLMES: The law came into force on the 20th of September, an incredibly important date, but we need many, many more incredibly important dates when we get so many small and medium-sized enterprises to engage in trade perhaps for the first time as a result of the possibilities of this legislation. When we have tens of nations around the world also passing similar legislation. And then as a result of one small, yet incredibly significant statute, we see economic, social, environmental benefits driven. That's the way to legislate for these new technologies attached to a common law and our financial services ecosystem in the UK.

BRIAN MCGLEENON: Lord Chris Holmes, thanks for coming on this week's episode of Yahoo Finance's "The Crypto Mile."

LORD CHRIS HOLMES: Pleasure. Thank you very much for the opportunity.

[MUSIC PLAYING]