BERMUDA Law and Practice Contributed by: Bourn Collier and Sharon A. Beesley, BeesMont Law Limited
1. Overview of Blockchain and Crypto- Assets 1.1 Blockchain 1.1.1 Evolution of Uses of Blockchain Through its longstanding and highly respected regula- tory regime, Bermuda has established itself as a lead- ing jurisdiction for digital assets and blockchain, with a broad-based ecosystem of licensed businesses and service providers across a range of activities. Beginning in 2018 with the Digital Asset Business Act (DABA), which introduced a licensing regime for firms carrying out “digital asset business” (defined below), a market supporting framework has evolved alongside DABA to include – a licensing regime for carrying out “digital asset issuance” under the Digital Asset Issu- ance Act (DAIA), introduced in 2020, various sandbox programmes (discussed below), detailed prudential and regulatory guidance published by the Bermuda Monetary Authority (BMA), along with active engage- ment across the digital finance industry in Bermuda. The BMA, which is Bermuda’s sole financial regulator, administers a principles-based regulatory framework comprising legislation, policies, guidance, codes of practice, and regular industry-wide consultations. It oversees all financial institutions in Bermuda and is a member of the Global Financial Innovation Net- work (GFIN), an innovative network of regulators, and cross-border testing framework. At the time of writing there are over 50 digital asset firms which are licensed or operating in sandbox operations overseen by the BMA, which has specialist expert teams covering digital asset licensing, Cyber Risk and Anti-Money Laundering (AML) and compli- ance aspects. Bermuda’s approach can be characterised as a com- prehensive but unified taxonomy of digital assets. The DABA definition of “digital asset” captures pay- ment and exchange tokens, security tokens and utility tokens, with certain carve-outs. Activities carried out by DABA licensees include sta- blecoin issuance, operating digital asset exchanges and derivatives exchanges, providing custodial wallet
service, liquidity services, operating settlement plat- forms, providing payment services, and securities and real-world asset tokenisation platforms. This is complemented by blockchain-enabled insurers and reinsurers operating under the Innovative Insurer Gen- eral Business (IIGB) and Innovative Insurer Long-Term (IILT) classes, alongside a broader cohort of compa- nies engaged in carbon and climate finance, AI and digital asset infrastructure, and tokenised investment fund structures. At the World Economic Forum in Davos, the Premier of Bermuda announced in tandem with Circle and Coin- base – Bermuda’s strategic positioning as a “fully on- chain national economy”, a milestone reflecting the maturity of the DABA framework and the depth of the stablecoin payments ecosystem now operating in and from the jurisdiction. The vision contemplates the pro- gressive migration of everyday economic activity onto public blockchain rails, with regulated stablecoins serving as the principal medium of exchange across merchant payments, government services, payroll and cross-border settlement, supported by the licensed digital asset infrastructure already established in Ber- muda. On 5–6 November 2025, the BMA announced the first deployment under its Embedded Supervision Initia- tive. Launched in February 2025, the Initiative tests the direct integration of regulatory oversight, compli- ance checks and reporting mechanisms into the tech- nological foundation of digital asset platforms – typi- cally within smart contracts, protocols or data layers – so that supervisory requirements are enforced in real time with limited human intervention. The first pilot, conducted through the BMA’s Innova- tion Hub in collaboration with Chainlink Labs, Apex Group, Hacken and Bluprynt, has been described by the BMA as a first-of-its-kind regulator-grade real-time oversight architecture for stablecoin issuance. Oper- ating on testnet, the pilot combines an issuer identity layer provided by Bluprynt, oracle and compliance infrastructure provided by Chainlink Labs, institu- tional asset servicing provided by Apex Group, and on-chain surveillance provided by Hacken, to render compliance conditions and assurance mechanisms in machine-readable form within blockchain infrastruc-
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