Craig Swan’s eyes light up and his smile widens as he talks about Bermuda’s ambitions to become the world’s first economy to go entirely chain-based, a move he is certain will create incredible new opportunities for the country’s citizens.
In an interview with CoinDesk in London, Swan, CEO of Bermuda’s Money Authority (BMA), spoke about his small island nation’s big plans.
“We held a huge event in Bermuda to educate our citizens on how to set up their crypto wallet, and we dropped $100 into Circle’s USDC stablecoin, and showed them how to use it for purchases, transfer it or send it to friends and family or convert it and even turn it into fiat if they want,” Swan said.
The experience was designed to simultaneously integrate local vendors and the public, Swan added. Participants were able to immediately test the ecosystem on an on-site marketplace, using their newly minted stablecoins to purchase goods, while payment processors like MoneyGram enabled immediate conversion back to paper money.
Driving demand at the DMV
While the pop-up market served as a sandbox, the BMA and the Bermuda Government are already evolving the infrastructure to be blockchain-ready. The island nation has amended its legislation to officially accept digital assets as public taxes, starting with its most important public sector.
“We’re starting in a high-volume area,” Swan explained. “Starting with the Department of Motor Vehicles, because most people have a car or a license. We’re going to spread this within the government itself.”
The financial migration represents the concrete execution of a roadmap first revealed at the World Economic Forum in Davos, where the Bermuda government announced a partnership with Circle and Coinbase to build the infrastructure for the world’s first fully on-chain economy. Circle deployed its Circle Mint infrastructure to power government digital treasury accounts, while Coinbase promised its engineering rails to streamline institutional and consumer onboarding.
Bermuda also recently announced a third major partnership. This time with Stellar for the upcoming rollout of its official digital Bermuda dollar, a sovereign-quality stable currency. Rather than competing with the traditional financial sector, Swan said he expects on-chain rails to coexist with traditional banks, which will continue to hold the fiat reserves backing digital tokens and provide localized custody.
“Reliance on legacy payment infrastructure has forced Bermudians to pay high fees and hindered further economic growth,” Premier E. David Burt noted after the Stellar announcement. By leveraging blockchain rails, Bermuda is attempting to bypass costly intermediary banking loops that eat into merchants’ thin margins, thereby keeping capital flowing natively on the island.
However, moving a national economy to a blockchain requires rewriting more than just banking rules, Swan said, emphasizing that it requires changing the definition of ownership.
“When you look at contract law and securities, in some cases it’s not clear whether or not a smart contract satisfies a legal transfer of ownership,” Swan observed. “We need to look at the legislation to make sure it is aligned. I think the island needs to make some adjustments when it comes to shares: the way the legislation registers a share register needs to be clear and indicate that it can exist in a digital form.”
Regulating the wave of AI agents
Bermuda’s testing programs have historically delivered massive macroeconomic results, Swan said. The island currently ranks among the three largest reinsurance centers in the world. The government is betting that its regulatory framework, the Digital Asset Business Act (DABA), can achieve the same global footprint for tokenized real-world assets (RWA) and decentralized finance (DeFi).
To prove this, Swan said the BMA recently concluded a pilot program focused on integrating compliance directly into smart contracts. The trial successfully demonstrated that the protocols could automatically freeze a transaction if the underlying collateral reserves fell below a specific threshold or block and trade entirely if an address violated real-time anti-money laundering or sanctions control.
To address these risks, Swan said the BMA is already looking beyond human traders to digital liquidity generated by automated machines. With this, he said, the BMA plans to deploy an AI payment center to research and supervise transactional flows initiated entirely by autonomous software.
For large G20 countries, scaling such an ambitious registry remains a regulatory bottleneck over several years. For Bermuda, its small population constitutes its main geopolitical advantage.
“Small jurisdictions with the necessary resources will be able to follow us,” Swan concluded, offering advice to other sovereign states seeking to digitize their financial architecture. “Larger jurisdictions should take a different train. But to attract serious business, it’s best not to race to the bottom.”
