The proposed digital Bermuda dollar will be issued privately rather than by the Government or a central bank, David Burt has said.

The Premier and Minister of Finance told Bloomberg that the digital currency would operate alongside other digital assets as Bermuda develops its onchain economy.

Mr Burt said: “That’s going to be privately issued, as we do not want a central bank digital currency.”

In March, the Premier said the island was preparing the ground for a digitally native Bermuda dollar.

He added that the Bermuda dollar, which is pegged one-to-one to the United States dollar, already works in a similar way to a stablecoin.

Mr Burt said: “Maybe it’s in banknote versus digital form, but that’s the same thing which we are creating already. We’re basically mirroring what exists in currency right now in digital form.”

The comments offer a clearer indication of the Government’s plans for the proposed currency. In March, Mr Burt said the Ministry of Finance and the Bermuda Monetary Authority were developing a legislative road map and evaluating possible technology partners.

No issuer or launch date has been announced. The Ministry of Finance has been contacted for more information.

The Premier was asked whether Bermuda is running a risk, effectively outsourcing its monetary infrastructure to Circle and the US regulatory system if USDC, the American company’s US-dollar stablecoin, were to become the dominant means of digital payment on the island.

Mr Burt said USDC was the easiest option for Bermuda and pointed to the Government’s longstanding relationship with Circle, but did not directly address the concern about dependence on the company.

He said: “USDC is easiest for us. We have a longstanding relationship with Circle and we’re continuing to do that.”

The Premier also defended Bermuda’s role as a testing ground for digital-finance projects, rejecting the suggestion that initiatives developed in an economy of about 60,000 people may have limited relevance elsewhere.

He said Bermuda’s international financial-services sector and regulatory experience mean companies based on the island can serve customers around the world.

Mr Burt said: “Yes, we are a good sandbox, and we want to make sure we work with the United States.”

He added that the US Government had sought Bermuda’s input as it worked to develop digital-asset regulation.

Earlier this month, the world's central bankers warned that privately issued stablecoins should not become the foundation of the monetary system as they do not meet the qualifications of money.

Bermuda passed the Digital Asset Business Act in 2018 and is home to operations belonging to companies including Circle, Coinbase and Kraken.

The Government announced in January that it would work with Circle and Coinbase towards making Bermuda the world’s first fully onchain economy.

In May, Cabinet approved a framework allowing the Government to accept, manage and invest in digital assets within a regulated structure.