The Government of Bermuda has announced plans to transform the island into the world’s first fully onchain national economy. This initiative was unveiled at the World Economic Forum Annual Meeting, with support from digital asset firms Circle and Coinbase.
Digital Asset Infrastructure and Support
Under the proposal, Circle and Coinbase will provide essential digital asset infrastructure, enterprise-grade tools, and technical support. This assistance will be extended to the Bermudian government, local banks, insurers, small and medium-sized businesses, and consumers across the island.
The companies also plan to actively assist with nationwide digital finance education and onboarding efforts. The primary aim of these efforts is to accelerate the adoption of digital finance across the entire economy.
Addressing Economic Challenges with Digital Finance
An onchain economy is defined by the use of blockchain-based digital assets as the everyday financial infrastructure for payments, settlements, and commerce. For Bermuda, a jurisdiction that is both small and highly entrepreneurial, with thousands of local businesses, traditional payment systems have long presented significant challenges.
Being frequently grouped with Caribbean and other island economies often results in limited access to onshore payment processors. This situation can lead to higher transaction fees and restrictive banking rails, ultimately compressing merchant margins.
By strategically leveraging digital finance, Bermuda aims to cultivate a more efficient and inclusive economic model. USDC, Circle’s dollar-pegged stablecoin, is anticipated to play a central role in this transformation. It is expected to enable merchants to accept fast, low-cost, dollar-denominated payments without the necessity of relying on expensive intermediaries.
Several live implementations already underway in Bermuda serve as demonstrations of how onchain payments can effectively support local commerce, facilitate peer-to-peer transactions, and meet necessary regulatory and compliance requirements.
Building on Regulatory Leadership
This initiative represents a continuation and building upon Bermuda’s early leadership in the realm of digital asset regulation. In 2018, the island distinguished itself by becoming the first jurisdiction to introduce a comprehensive legal framework specifically for digital assets. This was achieved through the passage of the Digital Asset Business Act.
This foundational legislation established clear licensing and oversight rules for digital asset firms operating within the country, providing a structured environment for growth and innovation.
Circle and Coinbase were among the initial global companies to successfully secure licenses under Bermuda’s established regulatory regime. Both firms have subsequently expanded their presence on the island, growing in parallel with the development of the island’s burgeoning digital finance ecosystem.
Government officials have stated that the newly announced onchain economy initiative signifies a direct continuation of Bermuda’s long-term strategic vision. This vision aims to firmly position the island as a leading global hub for compliant, innovation-driven digital finance.