Bermuda is pursuing an ambitious plan to become the world's first fully on-chain national economy, using digital assets and blockchain technology as the foundation for everyday financial services. In January 2026, Prime Minister David Burt announced at the World Economic Forum in Davos that the island nation would partner with Circle and Coinbase to transition its economy onto blockchain infrastructure, aiming to lower transaction costs, improve access to dollar-denominated payments, and keep economic value circulating locally.

This move represents a significant shift in how governments and financial institutions view blockchain technology. Rather than treating crypto as a speculative asset class, Bermuda is positioning digital assets as core infrastructure for government services, payments, and commerce. The initiative builds on years of regulatory groundwork that has made Bermuda an attractive hub for digital asset businesses.

How Has Bermuda Built the Foundation for an On-Chain Economy?

Bermuda's path to becoming a blockchain-first nation didn't happen overnight. The country began laying regulatory groundwork as early as 2018, establishing comprehensive frameworks that provided legal clarity and certainty for digital asset businesses. This early action attracted companies seeking regulatory confidence and positioned the island as a leader in blockchain governance.

• Digital Asset Business Act (DABA): Introduced in 2018, this legislation applies to entities incorporated in or outside Bermuda that conduct digital asset business within the jurisdiction. It covers a broad range of activities and services, providing both legal clarity and regulatory certainty.
• Digital Asset Issuance Act (DAIA): This framework came into force in May 2020 and specifies activities that constitute digital asset issuance. It superseded earlier legislation and continues to be supplemented by rules and principles from the Bermuda Monetary Authority (BMA).
• Cybersecurity and Prudential Standards: Bermuda issued the Digital Asset Business (Cybersecurity) Rules 2018, the Digital Asset Business (Client Disclosure) Rules 2018, and the Digital Asset Business (Prudential Standards) Rules 2018 to ensure consumer protection and operational security.

The Bermuda Monetary Authority, the country's financial regulator, licenses crypto exchanges, yield-bearing stablecoin structures, and decentralized finance (DeFi) protocols. DeFi refers to financial services built on blockchain networks that operate without traditional intermediaries. The BMA enjoys far-reaching supervisory and enforcement powers, including issuing regulations, codes of practice, and guidance.

What Role Do Stablecoins and Digital Currency Play?

Stablecoins, digital tokens designed to maintain a stable value by being backed by reserves like US dollars or government bonds, are central to Bermuda's on-chain vision. The country has recognized stablecoins as a distinct category of digital assets under Bermudan law, and the Bermuda Commercial Bank, one of the country's four licensed banks, has demonstrated that a fully compliant, lower-cost stablecoin system is technically feasible for everyday payments.

In March 2026, Prime Minister Burt announced that work had begun on creating a Bermudan digital dollar. Rather than issuing a central bank digital currency (CBDC), which the authorities had previously ruled out, Bermuda is partnering with the Stellar Development Foundation to support the Digital Bermuda Dollar on its blockchain network. Burt stated that a Bermudan digital dollar would help improve government services and create the least friction in citizen-to-government interactions.

Digital assets like stablecoins are expected to exist alongside the traditional financial sector, with banks holding the fiat reserves that back the digital tokens and provide local custody. In November 2024, the BMA issued guidance clarifying the standards it expected from organizations issuing single-currency pegged stablecoins, including full reserve backing in high-quality liquid assets and redemption rights for holders.

Which Companies Are Building Bermuda's On-Chain Infrastructure?

Bermuda has deliberately used regulated, private-sector financial companies to develop the technology infrastructure rather than building it entirely itself. This approach has attracted major players in the crypto and fintech space, each contributing specialized expertise to different aspects of the on-chain economy.

Several firms have established partnerships and licenses to support Bermuda's digital asset ecosystem. Circle and Coinbase are the primary partners in the government's on-chain transition initiative. Bitcoin Suisse International holds dual approval under the DABA and the Investment Business Act to provide regulated digital asset management and investment advisory services from Bermuda. Kraken's parent company, Payward, has a partnership focused on expanding tokenized financial products for institutional investors. Kimber Digital Assets Bermuda ISAC Ltd, known as Plume, holds a Class M Digital Asset Business licence to support Bermuda with regulated tokenized real-world asset initiatives. The NEAR Foundation operates as an infrastructure partner for AI-powered public services.

The Bermuda Monetary Authority also operates sandbox licensing regulations that allow fully operational companies to fall under Class F status, enabling them to test, launch, and scale their activities in a regulated environment. This sandbox approach has been instrumental in attracting innovation while maintaining oversight.

How Does Bermuda's Approach Differ From Wall Street's Blockchain Adoption?

While Wall Street institutions like Citi, Mastercard, Visa, and the Depository Trust and Clearing Corp. (DTCC) are testing blockchain infrastructure for payments, asset tokenization, and settlement, their approach remains incremental and focused on specific use cases within existing financial systems. Bermuda's strategy is fundamentally different: it is attempting to make blockchain the primary infrastructure layer for an entire national economy.

Wall Street's first major crypto push centered on trading products and investment access through exchange-traded funds (ETFs), which are investment funds that track crypto assets and trade on traditional stock exchanges. Banks and asset managers are now moving blockchain closer to the financial system's foundational infrastructure, but this transition is happening within the context of existing regulatory frameworks and alongside traditional finance.

Bermuda's on-chain initiative, by contrast, is attempting to integrate blockchain from the ground up into government services, tax payments, and everyday commerce. The country has amended legislation to ensure that digital assets are accepted for tax payments and has started with what it describes as "high-volume areas," such as the department of motor vehicles, reflecting the fact that most Bermudans have cars or driving licenses.

This difference in approach reflects a broader shift in how blockchain technology is being evaluated. Rather than viewing crypto as a speculative asset or a tool for specific financial products, Bermuda is positioning it as foundational infrastructure that can reduce costs and improve efficiency across government and commerce. As institutional adoption accelerates globally, Bermuda's experiment will provide valuable data on whether blockchain can serve as the backbone of a national economy.