An initiative by the Government to make Bermuda the home of the world’s first fully onchain economy has won the backing of at least one of the island’s banks, whose executives believe the plan is highly achievable.

Bermuda Commercial Bank said it was the island’s leading digital asset bank and already banked about 85 per cent of the island’s digital asset business.

Officials there have laid out for The Royal Gazette how the Government’s planned on‑chain payments pilot could function in practice, from stablecoin wallets on mobile phones, to the “on‑ramp/off‑ramp” banking systems which enable customers’ fiat currencies to be exchanged seamlessly with crypto currencies.

David Burt, the Premier, announced plans last month for Bermuda to become the world’s first onchain economy. In the announcement, he said banks and financial institutions would start integrating tokenisation tools into their businesses.

When approached by The Royal Gazette, BCB executives stressed they had not been formally appointed to the project and did not want to be presented as the Government’s chosen vendor but said their existing Application Programming Interface (API)‑driven infrastructure showed that a fully compliant, lower‑cost stablecoin system for everyday payments in Bermuda was technically feasible.

Stablecoins are like Circle’s USDC allow fast, low-cost, transactions pegged to the US dollar. They are considered to be more reliable than pure cryptocurrencies like Bitcoin whose value can be much more unpredictable.

Andy Mielczarek, the executive chairman and chief executive, said: “Right now, we’re not involved.” But he added that the Government was still in the planning stages.

“As soon as the Ministry of Finance confirms their plans, if they ask us, we’d love to help out,” he said. “Strictly, we haven’t signed up to do it yet.”

Hugo Rogers, the chief executive of Base Financial Ltd, the bank’s holding company, praised David Burt’s earlier announcement at Davos for Bermuda to be the world’s first entirely on-chain economy. “Conceptually, it’s an excellent idea,” he said.

“It can make a big difference to the Bermuda economy. It can make a big difference to people’s cost of doing business — individuals, merchants and so on.”

Even so, Mr Mielczarek said the bank already played the role that a government pilot would need from a regulated institution.

“What you need to make this sort of stuff work, you need an on‑ramp, off‑ramp bank like us, and then you need a wallet provider,” he said.

“We don’t have an issue with it at all. That’s what we do for a living, and our correspondent banks, likewise, are very happy with it.”

For the pilot, the Government has announced partnerships with Coinbase and Circle, who can provide digital-wallet technology to consumers.

Meanwhile, the bank’s technology, already in use with large digital asset clients, lets it open “virtual” accounts for those same end‑users behind the scenes via APIs, which provide the on-ramp/off-ramp solution.

“If you had an account with Coinbase or Kraken or [another exchange], our relationship with them means they could open a bank account on your behalf in your name, which then allows you to pull and push money in and out of your account,” Mr Mielczarek said.

“The way we’ve built that solution allows us to do all the financial anti-crime compliance, transaction monitoring, sanctions screening and everything else. That’s a capability that’s pretty much unique to us.”

Mr Rogers added that merchants could see a powerful financial incentive.

“Because I’m saving 3 per cent for every transaction, or the merchant turns around and says ‘This is the way you can pay me because I save 3 per cent,’ which I can then put back into the system,” he explained. “And it all speeds up working capital as well for those merchants and consumers.”

Although some observers question whether banks can realistically meet know-your-customer and anti‑money‑laundering obligations in an on‑chain system, the executives insist this is exactly what their model is designed to do.

“We specialise in this area,” Mr Mielczarek said. “Banks have a huge amount of accountabilities.

“We’ve been investing a lot in the technology to be able to do that with customers that are involved in digital assets. So it’s what we do for a living. We know how to do it. It’s not a problem at all.”

Instead of the old omnibus account model where “everyone’s money would be poured into one account,” the bank uses APIs to open individual virtual accounts for each end‑user, allowing every payment to be traced and screened.

“All of those payments unbundle to the individual customer,” he said.

Mr Rogers added that this created “the full audit trail that, frankly, modern technology allows you to create”.

The Premier has said he intended to make the Transport Control Department the first test case, and Mr Mielczarek said that choice “makes sense” because TCD already has a modern, contained system where people buy bus and ferry tokens digitally.

“They have a relatively self‑contained and relatively modern technology estate,” he said. “At the moment, if I go on to my Shorelink app, I’ve got my checkout. I’m already buying tokens.

“So you can see, from a design perspective, turning that over from a card checkout to a stablecoin checkout is a relatively trivial piece of work from a technology perspective.”

He contrasts that with other parts of government still using “cash and cheques and drafts”, which would be harder to integrate.

In an on‑chain version of Shorelink, he said, users could have a “one‑touch checkout” experience rather than pulling out a physical card, effectively approximating Apple Pay but built on stablecoins.

For Mr Mielczarek, the real test of success would be whether people, once exposed to it, actually choose to keep using it.

“The pilot is working when somebody says, ‘I’m going to spend some money buying some more stablecoins,’ and then they keep refilling their wallet,” he said. “If I’m an individual and I’m spending stablecoins and I like how easy that is to do, I’m going to need to buy some new stablecoins.”