Bermuda Partners With Circle, Coinbase and Stellar to Build the World’s First Onchain Economy

TLDR

• Bermuda is working with Circle, Coinbase, and Stellar to build the world’s first fully onchain economy
• The Bermuda Monetary Authority airdropped $100 in USDC to residents to test real-world crypto payments
• Government fees will soon be payable in digital assets, starting with the Department of Motor Vehicles
• A sovereign Bermuda Digital Dollar is being developed using Stellar’s blockchain infrastructure
• Laws covering property, contracts, and securities are being updated to support smart contracts and digital ownership

Bermuda is moving forward with plans to shift its entire economy onto blockchain infrastructure. The small island nation has partnered with Circle, Coinbase, and Stellar to make it happen.

The Bermuda Monetary Authority ran a public test where residents received $100 in USDC, Circle’s stablecoin, via airdrop. People used the funds at a pop-up marketplace to buy goods, send money to others, or convert back to cash. Payment processors like MoneyGram were on-site to handle conversions.

Craig Swan, CEO of the Bermuda Monetary Authority, said the goal was to onboard vendors and the public at the same time. The test gave residents hands-on experience with crypto wallets and digital payments in a live environment.

Government Payments Going Digital

The next step is accepting digital assets for government fees. Bermuda is starting with its Department of Motor Vehicles, which handles high transaction volumes since most residents own a vehicle or license. Swan said the plan is to expand that across all government departments over time.

Circle has deployed its Circle Mint infrastructure to power government digital treasury accounts. Coinbase is providing engineering support for both institutional and consumer onboarding.

The roadmap was first announced at the World Economic Forum in Davos. The Bermuda government revealed partnerships with Circle and Coinbase at that event before later adding Stellar for the digital dollar project.

The Bermuda Digital Dollar

Bermuda recently announced a partnership with Stellar to launch a sovereign digital currency called the Bermuda Digital Dollar. It will function as a stablecoin backed by fiat reserves held by traditional banks.

Premier E. David Burt said the current reliance on legacy payment systems has led to high fees for Bermudians and slowed economic growth. Blockchain infrastructure is expected to reduce those costs by cutting out expensive intermediary banking steps.

Swan said traditional banks will still play a role. They will hold the fiat reserves that back the digital tokens and provide local custody services.

Updating the Law

Moving a national economy onchain requires legal changes, not just technical ones. Swan said contract law, property law, and securities rules all need to be updated to recognize smart contracts as legally valid.

The BMA recently completed a pilot where compliance rules were built directly into smart contracts. In the test, transactions were automatically blocked if collateral reserves dropped too low or if an address flagged an anti-money laundering check.

Bermuda is also developing an AI payments hub to monitor transactions made by automated software agents, not just human traders.

Swan said smaller nations have an advantage in moving fast. Bermuda’s small population means fewer regulatory obstacles and faster implementation timelines.

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