Bermuda's Vision for a 'Fully On-Chain' Economy Through Coinbase and Circle

Bermuda is setting its sights on establishing blockchain infrastructure as the core of its economy. The island's government is launching plans for a “fully on-chain” financial system, teaming up with cryptocurrency exchange Coinbase and stablecoin issuer Circle.

Key Takeaways

Bermuda aims to create a fully on-chain economy using partnerships with Coinbase and Circle.
The initiative targets high fees and slow transaction times that impede local businesses.
The framework will use blockchain-based stablecoins to streamline financial operations.
A pilot program will launch using Circle's USDC stablecoin for government and local transactions.
The project promotes digital literacy and financial inclusion without mandating the use of on-chain tools.

Bermuda Bets on ‘Fully Onchain’ Economy in Coinbase, Circle Stablecoin Push

This initiative was announced during the World Economic Forum Annual Meeting in Davos, where company executives, along with Bermuda's Premier David Burt, shared a vision for integrating digital assets into everyday transactions, financial services, and government operations.

Overcoming Challenges with Blockchain

Bermuda, with around 65,000 residents, faces significant challenges from traditional financial systems. Like many Caribbean regions, local merchants and institutions often encounter high transaction fees, limited access to banking services, and delayed settlement times due to the withdrawal of major international banks.

These financial obstacles have affected the competitiveness and profit margins, especially for small to medium-sized enterprises.

The new proposed on-chain framework is designed to alleviate these issues by utilizing dollar-backed stablecoins for transactions and using blockchain for settlement instead of relying on conventional banking systems.

USDC Drives Daily Transactions in Bermuda

In this collaborative effort, Bermuda plans to work with Circle’s USDC stablecoin and Coinbase’s Base infrastructure to implement stablecoin payments across government sectors, financial entities, and local businesses.

The initial phase will focus on implementing payment systems, providing financial institutions with tokenization tools, and offering digital literacy programs to help residents understand and navigate digital finance safely.

Premier Burt emphasized the initiative's aim to create new opportunities, ensuring that the people of Bermuda directly reap the rewards from changes in the global financial landscape.

This announcement builds on Bermuda's previous advancements, including the introduction of the Digital Asset Business Act in 2018, which is managed by the Bermuda Monetary Authority. Since then, over 40 digital asset firms have received licenses or have entered regulatory sandboxes supervised by the Authority.

Coinbase and Circle were among the first international firms approved within this framework, with Coinbase currently running a derivatives platform for users outside the U.S.

In 2025, further momentum was gained at the Bermuda Digital Finance Forum, where the government, Coinbase, and Circle conducted an on-chain USDC airdrop for real-world trial. Participants received 100 USDC, which could be spent at newly partnered local merchants.

The government reported that this experiment resulted in a significant increase in the number of businesses accepting digital payments and a rise in engagement from local financial institutions.

Officials plan to enhance these efforts at the upcoming Bermuda Digital Finance Forum in May 2026, anticipated to include broader business engagement and increased consumer incentives.

USDC as a Key Component of the Strategy

The USDC stablecoin is integral to Bermuda's strategy since it maintains a 1:1 peg to the U.S. dollar, enabling merchants to receive payments quickly and affordably without exposure to price fluctuations affecting cryptocurrencies like Bitcoin.

Some businesses in Bermuda are already utilizing USDC for transactions, and the government views this as a way to modernize payments while remaining linked to the stability of the U.S. dollar.

Participation in this initiative will be voluntary; no resident or business is required to adopt on-chain solutions. Moreover, the collaboration with Coinbase and Circle is non-exclusive.

The approach is positioned as a gradual transition, supported by educational initiatives and incentives intended to promote adoption over time.

Officials believe that establishing on-chain infrastructure can enhance Bermuda's economic position, while also opening access to global capital markets for local businesses.

In Bermuda, there are no income or capital gains taxes on digital assets, and the government has taken a compliance-focused stance, emphasizing licensing, audits, and reserve standards for stablecoin issuers.