The government of Bermuda announced on January 20 at the World Economic Forum Annual Meeting in Davos that it plans to transition the country’s national economy to a fully on-chain model, positioning itself as the first jurisdiction in the world to do so.

?? JUST IN: Bermuda is building the world’s first fully onchain national economy, backed by Coinbase and Circle. pic.twitter.com/lkqKxkKwfX

— Cointelegraph (@Cointelegraph) January 19, 2026

To support the initiative, Bermuda has entered into strategic partnerships with major U.S.-based crypto exchange Coinbase and stablecoin issuer Circle. Through this collaboration, Bermuda aims to modernize its financial system by integrating blockchain-based payments, tokenization, and digital financial infrastructure across both the public and private sectors.

According to the announcement, Coinbase and Circle will provide crypto infrastructure and tools to the Bermudian government, local banks, insurance companies, and small and medium-sized businesses. The initiative also includes nationwide digital finance education programs and technical support to accelerate adoption among citizens.

Key objectives include implementing stablecoin-based payments within government departments and expanding the use of USDC at local merchants. Financial institutions will also be encouraged to adopt tokenization technologies and other digital finance tools as part of the broader transition.

Lower Payment Costs and Greater Economic Efficiency

The decision reflects economic challenges common to island nations. In Bermuda, many businesses face high transaction costs and operational constraints due to reliance on external payment processors and traditional banking systems.

These intermediaries often increase fees and reduce profit margins for local companies. The government cited cost reduction as a primary motivation behind the move, with USDC positioned as a practical solution.

By using USDC, an USD-pegged stablecoin similar in functionality to USDT, merchants can accept payments faster and at significantly lower costs. Pilot programs have already demonstrated tangible benefits, including reduced fees and stronger support for local commerce.

At a digital finance forum held in 2025, each participant received $100 in USDC, which could be spent at participating local businesses. The initiative successfully demonstrated early-stage adoption and real-world usability.

Strong Regulatory Foundation and Long-Term Vision

Bermuda is recognized as one of the first jurisdictions to introduce comprehensive digital asset legislation, having enacted its regulatory framework in 2018. Coinbase and Circle were among the earliest global firms to obtain licenses under this system.

Coinbase CEO Brian Armstrong praised Bermuda’s clear regulatory structure and strong public-private collaboration, noting that years of regulatory preparation made this ambitious transition possible.

Looking ahead, a major expansion phase is expected around a forum scheduled for May 2026. This will include pilot programs for government payments and deeper integration of tokenization tools within financial institutions. Market observers are also watching closely for the potential inclusion of Bitcoin and other major cryptocurrencies in future payment systems.

Premier David Burt emphasized that the initiative is designed to reduce costs, create new economic opportunities, and strengthen national resilience. Rather than a narrow payments upgrade, the plan represents a comprehensive national strategy encompassing education, infrastructure, and long-term financial innovation.