Bermuda Taps Coinbase & Circle for ‘Fully Onchain’ Economy
Bermuda partners with Coinbase and Circle to migrate government and merchant payments to USDC rails, aiming to bypass high offshore banking fees.
The Government of Bermuda announced plans today at the World Economic Forum in Davos to transition its national infrastructure to a “fully onchain” model, backed by technical support from Coinbase and Circle. The initiative aims to migrate government tax collections, social services, and merchant payments onto USDC rails, effectively bypassing traditional banking intermediaries that often penalize island jurisdictions with high fees.
The transition aims to deliver lower transaction costs, greater access to global finance through digital wallets, and infrastructure that keeps economic value circulating locally.
The Mechanism
Under the agreement, Circle and Coinbase will deploy enterprise-grade treasury tools to local banks and government agencies. The rollout focuses on three immediate vectors:
- Government Revenue: Agencies will pilot accepting stablecoins for taxes and fees.
- Merchant Settlement: Local businesses gain access to USDC settlement rails to avoid credit card processing fees (often 3-5% for offshore entities).
- Citizen Onboarding: A national digital literacy program will equip residents with self-custody wallets.
Institutional Context
This partnership is not a cold start. It builds on the island’s 2018 Digital Asset Business Act, a regulatory framework that attracted early crypto capital while the U.S. remained in deadlock. The collaboration also follows a proof-of-concept at the 2025 Bermuda Digital Finance Forum, where attendees received a 100 USDC airdrop to test local merchant acceptance.
For Bermuda, the move is a defensive play against de-risking by global correspondent banks, which have historically restricted access for Caribbean nations. By moving to onchain settlement, the territory effectively creates a parallel payment network immune to legacy banking bottlenecks.
Market Reaction
Coinbase (COIN) shares remained relatively flat on the news, trading up 0.78% to $241.15 amid a broader tech sector pullback. The market response suggests investors view this as a long-term infrastructure play rather than an immediate revenue driver. The next phase of the rollout is scheduled for the Bermuda Digital Finance Forum, set for May 11-14, 2026.
