Government partners with Circle, Coinbase, Stellar to build sovereign digital dollar and blockchain infrastructure
Bermuda announced it would become the world’s first economy to go fully onchain, a move officials believe will bring its people new opportunities while reducing reliance on legacy payment systems that impose high fees.
The Bermuda Monetary Authority, led by CEO Craig Swan, is partnering with Circle, Coinbase, and Stellar to construct blockchain infrastructure including a sovereign Bermuda digital dollar. The initiative builds on the government’s Digital Asset Business Act (DABA) regulatory framework, which officials are positioning as a global standard for tokenized real-world assets and decentralized finance.
The partnership was announced at the World Economic Forum in Davos, though the exact date was not specified in available sources.
Real-World Testing Underway
Bermuda has already begun pilot deployments. The BMA airdropped $100 in Circle’s USDC stablecoin to residents and hosted a pop-up marketplace to demonstrate wallet setup, purchasing, transfers, and conversion back to fiat currency.
“We carried out a huge event in Bermuda to educate our citizens on how to set up their crypto wallet, and we airdropped $100 in Circle’s stablecoin USDC, and showed them how to use it for purchases, transfer or send it to friends and family or convert it and even offramp it into fiat if they chose to,” Swan said.
The government has amended legislation to officially accept digital assets for public taxes. The Department of Motor Vehicles will serve as the initial pilot site because most residents interact with that agency for licenses and vehicle registration.
“We are starting at a high-volume area. Starting with the Department of Motor Vehicles, because most people have a car or licenses. We are going to cast that across the government itself,” Swan said.
Smart-Contract Compliance and Regulatory Innovation
Regulators are updating laws covering property, contracts, and securities to accommodate blockchain-native systems. The BMA recently concluded a pilot program embedding compliance directly inside smart contracts, demonstrating that protocols could automatically freeze transactions if collateral reserves fell below thresholds or block exchanges if addresses violated anti-money laundering or sanctions screening.
The authority plans to deploy an AI payments hub to research and supervise transactional flows initiated by autonomous software. This addresses a core legal ambiguity that regulators worldwide still grapple with.
“When you look at contract law, and if you look at securities, in some cases, it’s not clear whether or not a smart contract satisfies a legal transfer of ownership,” Swan said.
Infrastructure and Scale
Circle deployed its Circle Mint infrastructure to power the government’s digital treasury accounts. Coinbase pledged its engineering rails for institutional and consumer onboarding. MoneyGram is also involved as a payment processor.
Premier E. David Burt framed the shift as necessary for economic competitiveness. “The reliance on legacy payments infrastructure has left Bermudians paying high fees and hindered additional economic growth,” he said.
Bermuda currently ranks among the world’s top three largest reinsurance centers. Swan suggested the onchain economy could serve as a model for smaller jurisdictions with comparable resources, though larger economies would require different approaches.
“Smaller jurisdictions with the resources will be able to follow us. Larger jurisdictions would have to take a different train. But to attract companies that are serious, it’s best not to race to the bottom,” Swan said.
The source did not specify a launch timeline for the Bermuda digital dollar, participation numbers for the USDC airdrop, or whether the onchain economy will be mandatory or optional for residents and businesses.
