Bermuda is working with Circle and Coinbase to build what is described as the world’s first fully “onchain” national economy, aiming to reduce payment costs and increase local value creation.
In recent years, authorities around the world have tested everything from digital central bank money to bespoke licensing regimes for crypto companies, but few have attempted to shift such a large chunk of daily payment and financial activity onto public blockchains in close collaboration with private players.
In Bermuda's plan, “onchain” means that blockchain-based digital assets and infrastructure should serve as the very foundations of the financial system, not just as tools for trading and speculation. Specifically, it is about enabling citizens and businesses to use stable digital dollars such as USDC in everyday payments, so that digital wallets and tokenized finance become a normal part of the economy.
The initiative was presented in Davos by Bermuda Prime Minister David Burt (center in the picture) along with Circle CEO Jeremy Allaire (left) and Coinbase CEO Brian Armstrong (right), underscoring both political and commercial support for the plan, even though the companies' internal decision-making processes are not open. Burt describes the model as a collaboration between government, oversight and industry to enable responsible digital finance at the national level, with Circle and Coinbase emerging as long-term infrastructure partners.
Bermuda's economy is dominated by service industries and thousands of small businesses that have long depended on expensive payment services and demanding cross-border banking connections. Authorities believe “onchain” payment infrastructure can reduce costs for both merchants and consumers, while allowing the island better access to global finance in a region where banking access is often vulnerable and costly.
Circle and Coinbase will deliver digital infrastructure and enterprise tools not only to the state, but also to local banks, insurance companies and small and medium-sized businesses. The two companies will also contribute training and hands-on onboarding, based on an assumption that the transition will only succeed if citizens and institutions understand how the solutions are used safely and in line with regulations.
The initiative builds on Bermuda's Digital Asset Business Act of 2018, which established a holistic licensing regime for digital actors. Circle and Coinbase were among the first global companies to be licensed under this regime, and have increased their presence as more digital finance activity has moved to the island.
The new announcement follows, among other things, pilots during the Bermuda Digital Finance Forum, where partners handed out USDC to participants and onboarded local stores that accepted payment in stablecoins. The next phase is planned to include government agencies testing payments in stablecoins, financial institutions adopting tokenization tools, and the population participating in national digital literacy programs — with the goal of a more inclusive and robust “onchain” economy.
