Bermuda Teams with Circle and Coinbase to Launch the World’s First Fully On‑Chain National Economy
Government initiative aims to shift the island’s entire financial infrastructure onto Base, the Coinbase‑built L2 network, with stablecoin USDC at its core.
Overview
On 19 January, the Bermudian government announced an ambitious plan to digitise virtually every economic transaction on the island using public‑chain technology. The project—marketed as the world’s first “fully on‑chain national economy”—will be supported by two of the crypto sector’s heavyweight players: stablecoin issuer Circle and exchange operator Coinbase.
The partnership is expected to provide the government, local banks, insurers, and businesses with a suite of digital‑asset infrastructure tools, as well as training programmes to help firms and citizens transition to on‑chain payments.
Why Bermuda Is Pursuing an On‑Chain Model
Bermuda’s economy, though small (estimated 2025 GDP ≈ $8.4 bn), is heavily oriented toward entrepreneurship and international commerce. Companies on the island currently rely on traditional payment rails that are costly and often subject to Caribbean‑regional processing fees.
By moving transactions onto a blockchain, officials argue that merchants can benefit from:
- Reduced transaction costs – eliminating middle‑man fees typical of legacy systems.
- Instant settlement – enabling real‑time cross‑border payments without correspondent‑bank delays.
- Broader access to global finance – leveraging the programmability of digital assets to connect with a worldwide DeFi ecosystem.
The government also highlighted existing proof‑of‑concepts in Bermuda where USDC, Circle’s dollar‑pegged stablecoin, has already been used for everyday payments.
Technical Backbone: Base and USDC
Coinbase’s Base—a Layer‑2 chain built on Optimism’s OP‑Stack—will serve as the network layer for the country’s on‑chain activities. Base offers high throughput and low gas fees, which aligns with the island’s goal of affordable payments.
Circle will supply USDC as the primary medium of exchange. Because the Bermudian dollar is pegged 1:1 to the U.S. dollar, a dollar‑stablecoin provides a natural bridge, allowing users to move seamlessly between fiat and crypto while maintaining price stability.
Both firms will also deliver enterprise‑grade APIs, compliance tooling, and onboarding assistance to help local institutions integrate the new stack.
Regulatory Context
Bermuda has been a pioneer in crypto regulation. The Digital Asset Business Act of 2018 created one of the first comprehensive legal frameworks for digital‑asset services, under which both Circle and Coinbase obtained licences that have since been expanded.
The proactive stance gives the island a regulatory head‑start compared with many other jurisdictions that are still drafting crypto‑specific rules.
Market‑Size Perspective
While Bermuda’s GDP is modest, the partners involved bring substantial financial firepower:
| Entity | Approx. Market Cap (2024) |
|---|---|
| Circle | $18.5 bn |
| Coinbase | $61.4 bn |
| Bermuda (GDP 2025) | $8.4 bn |
The disparity underscores the scale of expertise and capital being poured into the project, which could accelerate adoption beyond the island’s borders.
Potential Implications
- Proof‑of‑Concept for Sovereign On‑Chain Economies – If successful, Bermuda could become a template for other small nations seeking to modernise their payment infrastructure.
- Catalyst for DeFi Integration – A national economy operating on a public chain may open pathways for decentralized finance services (lending, insurance, tokenised assets) to be offered directly to citizens and businesses.
- Regulatory Benchmarking – The initiative may influence how regulators worldwide approach the balance between innovation and consumer protection in a sovereign context.
- Competitive Pressure on Traditional Providers – Lower fees and faster settlement could force regional banks and payment processors to revamp their own offerings.
Challenges remain, including ensuring robust cyber‑security, managing liquidity for stablecoin reserves, and convincing entrenched legacy institutions to migrate.
Key Takeaways
- Bermuda aims to become the first nation whose entire economy runs on a public blockchain, using Base and USDC.
- Circle and Coinbase will supply the core infrastructure, enterprise APIs, and educational resources.
- The move targets high transaction costs and limited access to global finance that current Caribbean payment rails impose.
- Regulatory foresight—Bermuda’s 2018 Digital Asset Business Act—provides a solid legal foundation for the experiment.
- Success could set a precedent for other small economies and accelerate mainstream DeFi adoption at a sovereign level.
The rollout is expected to begin later this year, with pilot programmes for government payments and select merchant merchants already in the pipeline. As the world watches, Bermuda’s digital‑currency experiment may well shape the next chapter of national finance.
Source: https://thedefiant.io/news/regulation/bermuda-taps-circle-coinbase-for-onchain-national-economy
