Stellar has achieved a major milestone in crypto adoption by partnering with the Government of Bermuda to move core financial activities onto the Stellar network. This partnership aims to make Bermuda the world’s first fully onchain national economy, a goal that was announced at the World Economic Forum earlier this year.
One of the key issues that Bermuda aims to address through this partnership is the high payment processing costs faced by local businesses, which can range from 3% to 10%. By leveraging digital assets and Stellar’s infrastructure, Bermuda hopes to keep more value circulating within the local economy.
As part of this initiative, Bermudians will be able to receive wages, pay merchants, settle government fees, and transfer digital assets directly through Stellar wallets. Government agencies are expected to pilot stablecoin-powered payment systems, while financial institutions will have access to tokenization tools built on Stellar’s regulated infrastructure.
It is worth noting that Bermuda has already established a digital asset regulatory framework through the Digital Asset Business Act of 2018, providing clarity and regulatory certainty for this initiative.
The Stellar network is positioning itself as a regulated financial infrastructure, focusing on real-world applications rather than speculative hype. This is demonstrated by its support of the Marshall Islands’ ENRA program, which distributed a nationwide onchain universal basic income using USDM. Now, Bermuda aims to scale this idea to transform its entire economy into an onchain nation-state.
Overall, this partnership between Stellar and Bermuda marks a significant step towards mainstream adoption of blockchain technology in the financial sector, showcasing the practical applications of onchain solutions in a real-world economy.