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Bermuda announced Monday at the World Economic Forum in Davos to transform itself into the world’s first fully blockchain-powered national economy.
Circle and Coinbase have committed to providing the digital asset infrastructure and institutional tools needed to support this transformation.
Bermuda moves payments up the chain
The initiative envisions the integration of digital assets into the nation’s everyday financial infrastructure, enabling blockchain-based systems to support payments and other essential economic activities.
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Circle and Coinbase also plan to facilitate this transformation by contributing to national digital financial literacy initiatives.
Bermuda has always believed that responsible innovation is best achieved through collaboration between government, regulators and industry, said David Burt, Prime Minister of Bermuda. He added that with the support of Circle and Coinbase, two of the most trusted digital financial companies in the world, we are strengthening our vision to enable digital finance at the national level.
A separate statement from Circle explained that Bermuda’s highly entrepreneurial economy is a major benefit of the blockchain-based economy. Local businesses can benefit from a model that relies less on local payment processors, who tend to raise fees and narrow business margins.
Bermuda’s latest announcements are in line with the island’s long involvement with digital assets.
History of Digital Asset Policy
Bermuda’s shift towards a blockchain economy builds on years of government engagement with digital assets.
A major breakthrough was achieved in 2018 with the introduction of the Digital Assets Framework, where the legislation establishes licensing requirements for exchanges, custodians, issuers and payment service providers operating in Bermuda.
Supervisory responsibilities have been assigned to the Bermuda Monetary Authority, aligning oversight with applicable financial services regulatory standards. Subsequent legislation expanded the framework to include the issuance of digital assets and national requirements for prudential reporting.
Government agencies have engaged industry participants through pilot regulatory environments and pilot programs. During this period, digital asset companies such as Circle, Coinbase and Binance obtained licenses to operate in this jurisdiction.
The Blockchain Economy Initiative reflects a continuation of current policy and not a sudden change in direction. It marks the next phase of the government’s long-term effort to integrate digital assets into the country’s financial architecture.
