The Green Line, a United Nations (UN)-monitored buffer zone between the ceasefire lines left over from the 1974 partition, continues to separate the island of Cyprus. Although they continue to be a part of the same island and, at the very least, of the same nation, the Greek and Turkish communities in Cyprus behave like de facto independent states. Approved on April 29, 2004, the Green Line Regulation Trade (GLRT) regulates the flow of people and products across the “Green Line” that divides the island’s government-controlled parts from the remainder. The purpose of this study is twofold. Our first goal is to identify the problems related to the GLRT between Northern and Southern Cyprus and provide an alternative solution. The second aim is to propose a model applicable to similar conflicting regions of the world and to suggest an alternative solution that integrates smart contract technologies for the study case.
The study on which this paper is based was performed on trade, called GLRT, from the north to the south part of Cyprus. This study employs a qualitative research method through the use of semi-structured interviews. The study employs a multiple-case design due to the substantial evidence and data sources. We conducted face-to-face interviews using semi-structured interview questions during the data collection process, utilising the in-depth interview method. The researcher used data triangulation to mitigate the risk of systematic errors during the data collection process. The study’s participants comprise 34 individuals.
This paper presents a proposal addressing the challenges of Green Line Regulation (GLR) in Cyprus. Smart contracts may facilitate untrusted trade by offering a secure and transparent mechanism for recording and verifying transactions. This approach may be helpful in mitigating the risks associated with fraud and misconduct while providing a secure transaction record suitable for auditing and dispute resolution. Smart contracts may be utilised to automatically enforce the terms of a trade agreement, thereby diminishing the necessity for trust among the involved parties.
The research is limited to the interviews conducted with academics, companies and individuals who implemented GLRT during the investigation. Nevertheless, we refrained from conducting interviews with the government representatives of Northern and Southern Cyprus, nor did we interview the central banks of both nations, which are regulatory bodies. The scope of this study does not encompass the perspectives of these individuals. Furthermore, this investigation does not encompass the conversion of Ethereum tokens acquired through smart contract trading into the currency currently in use.
The paper includes our proposed blockchain model to trade securely without needing a trusted third party (e.g. bank, chamber of commerce, etc.) via smart contracts written in the Solidity programming language on the Ethereum blockchain. Individuals and companies trading within the scope of GLRT can use the mobile or web applications proposed in this study. All parties can make mutual financial agreements through this application and have a safer trading environment.
Existing research on the GLR predominantly focuses on assessing trade volume and capacity rather than addressing the technological and trust-related challenges within this trade framework. While smart contracts have been explored for enhancing efficiency and reducing costs in international trade, their application in conflict-affected trade zones remains largely unexamined. To our knowledge, no prior studies have proposed a technological solution to facilitate trade in politically and legally fragmented regions such as the Green Line. This study fills a critical gap by introducing smart contract technology as a trust-enabling mechanism in GLR trade. Traditional financial instruments such as letters of credit and checks are often unavailable or unsuitable due to the lack of mutual legal recognition between parties. Smart contracts, operating independently of a trusted third-party intermediary, provide a novel enforcement mechanism, ensuring secure and transparent transactions even in an untrusted environment. By demonstrating how smart contracts can address the specific challenges of GLR trade, this study contributes to both academic literature and practical policymaking, offering a scalable and technology-driven approach to cross-border trade in conflict-affected regions.
