The Government of Bermuda said it plans to shift key parts of its economy onto blockchain-based infrastructure, positioning the island to become the first country to operate core financial activity fully onchain.
What Happened
Under the proposal, Bermuda would use public blockchain networks and dollar-denominated stablecoins to support payments, commerce, and financial services across the economy.
The initiative goes beyond regulatory experimentation and aims to embed onchain settlement directly into everyday economic activity, including merchant payments and government-led pilots.
Officials framed the move as a response to structural constraints faced by small island economies, particularly high transaction costs and limited access to global banking and payment rails.
Bermuda has long been classified alongside offshore and Caribbean jurisdictions by global payment processors, a designation that often results in higher fees, slower settlement, and restricted access to correspondent banking.
Rather than launching a central bank digital currency, Bermuda’s approach relies on existing private stablecoin infrastructure.
The government confirmed plans to use (USDC) for payments and settlement, working with U.S.-based firms including Circle and Coinbase.
That decision effectively outsources parts of national payment infrastructure to privately issued digital dollars, raising questions about long-term dependency and oversight.
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Why This Matters
The initiative builds on Bermuda’s Digital Asset Business Act, enacted in 2018, which established one of the earliest regulatory frameworks for crypto companies.
However, this marks a shift from regulation to direct usage.
Government agencies are expected to participate in pilots that use stablecoins for transactions, moving blockchain from a compliance category into operational deployment.
Officials argue that onchain settlement could reduce friction for merchants and consumers by enabling faster payments, lower fees, and direct access to dollar liquidity without relying on traditional intermediaries.
The government has also signaled interest in tokenized finance and onchain financial products as part of the broader economic model.
The plan positions Bermuda as a test case for whether blockchain-based systems can replace or supplement traditional banking infrastructure at a national level.
No timeline was provided for full deployment, and officials did not disclose how risks related to compliance, consumer protection, or systemic dependence on U.S.-regulated entities would be managed as adoption expands.
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