Bermuda Pushes Stellar-Based National Payments Infrastructure in On-Chain Economy Trial

Bermuda is moving to build digital payments and financial infrastructure on the Stellar network, shifting functions such as payroll, government fee payments and stablecoin transactions onto blockchain rails in a test of an on-chain national economy.

Crypto media outlet Odaily reported on May 12 that the Stellar Development Foundation and the Bermuda government jointly announced a plan to move core payments and financial services onto the Stellar network.

The project will be pursued under the Digital Asset Business Act, the regulatory framework Bermuda introduced in 2018.

The government said it aims to significantly reduce payment processing costs for local merchants, which currently run at about 3% to 5%.

Under the plan, Bermuda residents would eventually be able to use Stellar-based digital wallets to receive wages, make retail payments, pay government fees and store digital assets.

The government also plans to pilot stablecoin-based payments.

Financial institutions would be able to use tokenized financial instruments, which are also slated for use in government spending systems including welfare payments.

The plan comes as some countries expand efforts to integrate stablecoins and blockchain-based payment infrastructure into parts of their national financial systems.