Bermuda will begin accepting 1:1 U.S. dollar-backed digital currencies for the payment of government taxes, fees and services the island's premier announced during the Bermuda Tech Summit.
Premier David Burt said the acceptance of the payments "will establish Bermuda as an example to other jurisdictions on how to adopt and benefit from the advancement of technology around digital currencies".
With this decision, Burt said, Bermuda was leveraging its expertise in regulating financial services and its "bespoke regulatory framework around digital assets to provide an environment to drive and showcase financial innovation".
From the beginning of next year, Bermuda will allow digital payments, provided they are licensed by the Bermuda Monetary Authority, in the form of stablecoins, which are pegged to the US dollar and derive their value from the fiat currency.
Currently, only one digital currency makes the grade, but within the coming months four others are expected to seek licensing approval from the Bermuda Monetary Authority.
Support has come from Circle, the first company to achieve a full licence under Bermuda's Digital Asset Business Act, and a group of others that include Binance, Bermudian-based Hub Culture, TrustToken and Stably.
In a statement, Circle's co-founder and CEO Jeremy Allaire said, "Bermuda's Premier made a broader announcement today about embracing stablecoins as the future of the financial system, with a focus on innovations in fintech that can deliver value not just for Bermudians, but also globally via companies licensed under their Digital Asset Business Act."