Bermuda Commits to ‘Fully On-Chain’ Economy with Coinbase and Circle
Bermuda partners with Circle and Coinbase to migrate government and banking settlements to USDC, aiming to bypass costly correspondent banking rails.
The Initiative
Bermuda announced a sovereign-level partnership with Circle and Coinbase to migrate its national financial infrastructure to blockchain rails. Unveiled Monday at the World Economic Forum in Davos, the initiative designates USDC as a primary settlement medium for government taxes, fees, and commercial payments. The project, described by Premier David Burt as a remedy for the “structural costs” of island banking, will pilot stablecoin rails across government agencies and local financial institutions.
The Institutional Context
This is not a retail crypto play. It is a sovereign de-risking strategy. Small island economies like Bermuda have long suffered from “de-risking,” global correspondent banks severing ties to reduce compliance exposure, driving up cross-border settlement costs and isolating local businesses. By shifting to a USDC-standardized rail (likely on Coinbase’s Base network, though the network specifics remain flexible), Bermuda aims to bypass these friction points entirely.
Coinbase CEO Brian Armstrong called the move a demonstration of “what’s possible when clear rules are paired with strong public-private collaboration.” The partnership builds on Bermuda’s 2018 Digital Asset Business Act, a regulatory framework that allowed both Circle and Coinbase to secure local licenses early.
Market Reaction
The announcement failed to buoy Coinbase (COIN) shares, which traded lower at $227 (-5.7%) amid broader market weakness, highlighting the disconnect between infrastructural wins and immediate equity repricing. USDC volumes remained robust at $20 billion over the last 24 hours, reinforcing its utility dominance in regulated jurisdictions.
What’s Next
The rollout begins immediately with government pilots for tax collection and social services payments. Financial institutions are simultaneously testing tokenization protocols for local assets. The government has scheduled a progress review for the Bermuda Digital Finance Forum in May 2026, where improved metrics on settlement speed and cost savings are expected to be released.
