Bermuda Taps Coinbase And Stellar For Onchain Economy Vision

Bermuda is pushing ahead with one of the most ambitious blockchain experiments ever attempted at a national level. The small island territory is working with Circle, Coinbase, and Stellar to build what it hopes will become the world's first fully onchain economy, a system where digital assets serve as everyday financial infrastructure rather than a parallel layer for enthusiasts.

A Three-Way Partnership Takes Shape

The initiative was first announced at the World Economic Forum in Davos on January 19, 2026, where Bermuda declared its intention to become the world's first fully onchain national economy. Circle and Coinbase intend to provide their digital asset infrastructure and enterprise tools to the Government of Bermuda, local banks, insurers, small and medium-sized businesses, and consumers.

The Stellar Development Foundation subsequently announced that Bermuda will begin moving key payment and financial-services activity onchain onto the Stellar network, marking the first operational milestone since the Davos announcement. Stellar's role centres on the upcoming rollout of an official Bermuda digital dollar, a sovereign-grade stablecoin.

For Bermuda, a small and highly entrepreneurial economy, traditional payment rails are costly and restrictive. Being grouped with Caribbean and other island jurisdictions can raise fees and limit access to onshore payment processors, squeezing already thin merchant margins. Local merchants currently pay 3 to 5 percent per transaction in card fees, with effective processing costs reaching as high as 10 percent in some categories.

Real-World Testing Already Under Way

The Bermuda Monetary Authority has begun real-world testing by airdropping USDC to residents, enabling payments at a pop-up marketplace, and preparing to accept digital assets for government fees starting with the Department of Motor Vehicles.

A key milestone came at the Bermuda Digital Finance Forum 2025, where the three partners executed an airdrop of USDC, distributing 100 USDC to every attendee for use with newly onboarded local merchants. Since then, additional Bermudian businesses have begun accepting digital payments, and local financial institutions have expanded their use of stablecoins and tokenized finance.

Regulators are also updating laws on property, contracts, and securities while piloting smart-contract-based compliance and an AI payments hub, aiming to make Bermuda a global centre for tokenized assets and decentralized finance.

Rather than building its own central bank digital currency from scratch, Bermuda is leveraging existing private-sector stablecoin infrastructure through its partnerships. The government's partnership with Coinbase and Circle is non-exclusive, meaning Bermuda can also work with other firms and technologies, and the onchain economy initiative is aspirational, with no mandatory requirement for residents or businesses to adopt onchain tools.

The transition is expected, over time, to deliver tangible benefits including lower transaction costs and greater access to global finance through modern digital wallets, with infrastructure designed to keep economic value circulating locally.

Sources:
Circle Press Release: Bermuda Plans to Be the First Fully Onchain National Economy
Stellar Development Foundation: Stellar to Power Bermuda's Onchain Economy Plan
CoinDesk: Bermuda, the Small Island Nation With Huge Crypto Ambitions