Bermuda has officially become the first country globally to move its entire economy onto blockchain technology. This significant development is not a test but a fully implemented system.
The Bermudan government announced at the World Economic Forum on Tuesday that all sectors of its economy, including public services, banking, insurance, payments, and general business operations, will now operate on blockchain infrastructure. This transition has been facilitated with the support of Coinbase and Circle.
Both Coinbase and Circle will manage the underlying technology, providing Bermuda with the necessary tools for processing digital payments, issuing stablecoins, and offering training to regulators and users. Their involvement aims to assist all types of businesses, from small local shops to large banks and government agencies, in adopting the on-chain system.
Merchants in Bermuda can now instantly accept dollar-based digital payments with minimal costs. Several businesses are already actively using this system. Customers pay using USDC, merchants receive funds within seconds, and all transactions adhere to compliance regulations. This eliminates the delays associated with traditional wire transfers and reduces transaction fees significantly.
This move builds upon Bermuda's proactive approach to digital assets, which began in 2018 with the passage of the Digital Asset Business Act, establishing the first comprehensive regulatory framework for cryptocurrency businesses.
Foundational Work Through Past Initiatives
Previous initiatives, such as airdrops and forums, played a crucial role in establishing the groundwork for Bermuda's new economic foundation.
During the Bermuda Digital Finance Forum held last year, the government, in conjunction with Circle and Coinbase, distributed 100 USDC to each attendee. This digital currency was immediately usable at local merchants that had recently integrated stablecoin payment options, leading to increased adoption of digital dollars by businesses, banks, and insurance companies. This initiative spurred significant growth in usage.
Premier David Burt emphasized that the success of this transition is a result of strong collaboration among the government, regulatory bodies, and private companies. He stated, "With the support of Circle and Coinbase, two of the world’s most trusted digital finance companies, we are accelerating our vision to enable digital finance at the national level. This initiative is about creating opportunity, lowering costs, and ensuring Bermudians benefit from the future of finance."
Jeremy Allaire, co-founder of Circle, expressed enthusiasm for expanding their partnership as Bermuda transitions its economy to digital rails. He remarked, "We are proud to deepen our engagement as Bermuda empowers people and businesses with USDC and onchain infrastructure."
Brian Armstrong, CEO of Coinbase, commented on Bermuda's successful approach, highlighting its combination of clear regulations and robust public-private coordination. He said, "Bermuda’s leadership shows what’s possible when clear rules are paired with strong public-private collaboration."
In December, at the SmartCon conference, Premier Burt suggested that larger nations could learn from Bermuda's structured approach rather than its speed. He advised, "It’s important that you give the private sector the tools, the space, the ability to innovate."
Echoing this sentiment, Burt told Forbes in 2019 that effective regulation provides clarity rather than attempting to micromanage. He noted that while markets can be unpredictable, they flourish when given adequate space to grow.