Bermuda Moves Toward World’s First Onchain Economy

Government Initiative Supported by Circle and Coinbase

At the World Economic Forum Annual Meeting, the Government of Bermuda announced plans to become the world’s first fully onchain national economy. This significant initiative has direct support from Circle, the issuer of USDC, and crypto exchange Coinbase. The move offers a clear look at how blockchain technology can shift from theoretical discussions to everyday practical use.

Understanding an Onchain Economy

An onchain economy fundamentally uses digital assets as its regular financial plumbing. Instead of relying solely on traditional banking systems, card networks, and slow cross-border payment methods, individuals and businesses will utilize blockchain-based tools like stablecoins. Stablecoins are digital tokens specifically designed to maintain a steady value, with USDC, for example, being pegged to the US dollar.

This transition holds particular importance for Bermuda. The island is home to thousands of small and medium-sized businesses that often face high fees and extended settlement times because traditional payment rails tend to classify island economies as higher risk. These additional costs can significantly impact already thin profit margins.

With the integration of USDC, a local café or an insurance firm could potentially accept dollar-based payments that settle within minutes, rather than days, and often at a considerably lower cost. Circle has indicated that several Bermudian merchants are already employing onchain payments, demonstrating how digital finance can operate within compliance frameworks while facilitating the movement of money locally.

A tangible demonstration of this concept occurred at the Bermuda Digital Finance Forum in 2025. During the event, the government, Circle, and Coinbase airdropped 100 USDC to each attendee. Participants then used this USDC to make purchases from newly onboarded local merchants, thereby generating immediate economic activity and providing practical learning experiences. Since then, an increasing number of businesses have begun accepting digital payments, and local financial institutions have expanded their use of stablecoins and tokenized financial instruments.

Significance for Investors and the Broader Industry

This announcement is built upon a long-standing regulatory foundation. Bermuda enacted its Digital Asset Business Act in 2018, establishing itself as the first jurisdiction to implement a comprehensive digital asset framework. Both Circle and Coinbase were among the initial companies to obtain licenses under this regime.

This regulatory clarity reflects a broader industry trend. A 2024 report from Chainalysis indicated that stablecoin transfers now represent more than half of all global onchain transaction volume. This growth is largely driven by payment and remittance activities, rather than speculative trading. Governments and financial institutions are increasingly recognizing the potential of stablecoins to combine the speed of blockchain technology with the familiarity of traditional currencies.

Bermuda’s model also exemplifies a developing strategy: public-private partnerships that combine clear regulatory guidance with practical pilot programs. Government agencies are set to test stablecoin payment systems, banks will integrate tokenization tools, and residents will participate in nationwide digital finance education initiatives.