How Bermuda and Coinbase Plan to Transform the Economy With USDC and On-Chain Finance

Bermuda is taking a bold step toward becoming the world’s first fully on-chain national economy. Through a strategic partnership with Coinbase and Circle, the island nation plans to integrate blockchain infrastructure and USDC stablecoin payments into everyday commerce, government services, and financial institutions.

The Bermuda fully on-chain economy initiative was unveiled at the World Economic Forum in Davos, where officials described a long-term vision to modernize the country’s financial system, reduce payment friction, and expand access to global capital markets. 

At the center of this transformation is the USDC stablecoin, issued by Circle and supported by Coinbase’s blockchain infrastructure.

Key Takeaways

• Bermuda is building a national on-chain economy using USDC for payments, tokenization, and government services.

• The Coinbase Circle partnership provides blockchain infrastructure, stablecoin tools, and digital finance education.

• The initiative aims to lower payment costs, improve settlement speed, and modernize Bermuda’s financial system.

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Bermuda’s Vision for a Fully On-Chain Economy

The Bermuda onchain economy plan is designed to place blockchain infrastructure at the core of the country’s financial system. 

Instead of relying on slow and costly correspondent banking networks, Bermuda intends to use dollar-denominated stablecoins and blockchain settlement rails for domestic and cross-border payments.

For a small island economy with around 65,000 residents, traditional financial rails have long posed challenges. 

Merchants and financial institutions face high fees, slow settlement times, and limited access to onshore banking partners due to global de-risking practices. These frictions have reduced competitiveness, especially for small and medium-sized businesses.

By adopting on-chain finance, Bermuda aims to bypass many of these structural inefficiencies while maintaining a stable link to the U.S. dollar through USDC.

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The Coinbase Circle Partnership Explained

The Coinbase Circle partnership is the technical and operational backbone of Bermuda’s blockchain transformation. Circle provides the USDC stablecoin, a fully reserved digital dollar designed to maintain a one-to-one peg with the U.S. dollar. Coinbase contributes blockchain infrastructure and enterprise tools, including support for Base, its layer-two network.

Under the agreement, Bermuda partners with Coinbase and Circle for blockchain development across multiple sectors. These include government payments, financial services, merchant acceptance, and asset tokenization. 

The collaboration is not exclusive, allowing Bermuda to work with other digital finance providers in the future.

USDC Stablecoin Payments Across Bermuda Government

Source: freepik

One of the most practical components of the plan is the rollout of USDC stablecoin payments across Bermuda government services. The government intends to pilot stablecoin payments within agencies and expand them to local businesses and financial institutions.

USDC is central to this strategy because it combines blockchain settlement speed with dollar price stability. Unlike volatile cryptocurrencies such as Bitcoin, USDC allows merchants and consumers to transact without exposure to sharp price swings.

Some Bermudian companies are already paying employees and contractors in USDC. The government views stablecoin payments as a commerce upgrade that modernizes transactions while remaining tied to the U.S. dollar.

Piloting Tokenization and Digital Finance Tools

Beyond payments, the Bermuda fully on-chain economy initiative includes tokenization tools for financial institutions. These tools will allow assets and financial instruments to be represented on blockchain networks, improving transparency, settlement efficiency, and accessibility.

The first phase of the program focuses on three pillars

• Payments using USDC

• Tokenization tools for financial institutions

• Nationwide digital finance education

This phased approach allows Bermuda to test real-world adoption while building regulatory and technical capacity.

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Nationwide Digital Finance Education

A key part of how Bermuda plans national blockchain finance infrastructure is education. The government, Coinbase, and Circle plan to launch digital literacy programs to help residents understand blockchain technology, stablecoins, and on-chain payments.

Officials believe education is essential to ensuring Bermudians benefit directly from financial modernization. Rather than forcing adoption, the government is promoting voluntary participation supported by incentives and training programs.

Regulatory Foundations and Policy Continuity

Bermuda’s move toward an on-chain economy is not a sudden shift. It builds on years of digital asset policy development.

In 2018, Bermuda introduced the Digital Asset Business Act, establishing licensing requirements for exchanges, custodians, issuers, and payment providers. Oversight is handled by the Bermuda Monetary Authority, aligning digital asset supervision with traditional financial regulation standards.

More than 40 digital asset firms have been licensed or admitted into regulatory sandboxes. Coinbase and Circle were among the earliest firms approved under this regime. Coinbase also operates a derivatives platform from Bermuda for non-U.S. users.

This policy continuity has positioned Bermuda as one of the most crypto-friendly jurisdictions globally.

Real-World Testing Through USDC Airdrops

Momentum accelerated in 2025 at the Bermuda Digital Finance Forum, where the government, Coinbase, and Circle tested real-world adoption using an on-chain USDC airdrop.

Attendees received 100 USDC, which could be spent at newly onboarded local merchants. Officials reported that the experiment led to increased merchant acceptance and deeper engagement from local financial institutions.

The government plans to expand these efforts at the Bermuda Digital Finance Forum 2026, with broader business participation and a larger consumer stimulus program.

Why USDC Is Central to Bermuda’s Strategy

USDC is the backbone of Bermuda’s on-chain finance model. It offers

• Dollar price stability

• Fast settlement times

• Low transaction fees

• Global interoperability

Because USDC is fully reserved and pegged to the U.S. dollar, it allows Bermuda to modernize payments without abandoning monetary stability.

The government also emphasizes compliance, licensing, audits, and reserve requirements for stablecoin issuers. There is no income or capital gains tax on digital assets in Bermuda, further strengthening its appeal as a digital finance hub.

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Global Implications of Bermuda’s Blockchain Initiative

Bermuda’s experiment has implications beyond its borders. If successful, it could serve as a blueprint for other small nations seeking to modernize financial infrastructure without building entirely new banking systems.

By combining stablecoins, blockchain settlement, and regulatory clarity, Bermuda is demonstrating a practical path toward national-scale on-chain finance.

Conclusion

Bermuda’s decision to build a fully on-chain economy marks one of the most ambitious national blockchain initiatives to date. Through its partnership with Coinbase and Circle, the island nation is integrating USDC stablecoin payments, tokenization tools, and blockchain infrastructure into everyday commerce and government services.

Rather than pursuing speculative crypto adoption, Bermuda is focusing on practical financial modernization. 

By reducing payment friction, lowering costs, and expanding access to digital finance, the Bermuda onchain economy could become a global reference model for responsible blockchain integration at the national level.

FAQ

What is the Bermuda fully on-chain economy initiative

It is a national plan to integrate blockchain infrastructure and USDC stablecoins into payments, financial services, and government operations.

Why did Bermuda partner with Coinbase and Circle

Coinbase provides blockchain infrastructure, while Circle issues USDC, enabling stable and compliant on-chain payments.

How will USDC be used in Bermuda

USDC will be piloted for government payments, merchant transactions, and financial services settlement.

Is participation mandatory for residents and businesses

No, adoption is voluntary and supported through education and incentives.

When will the on-chain economy be fully implemented

The rollout will occur in phases, starting with pilot programs and expanding over time.

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