Bermuda has launched a digital token to stimulate the local economy following the COVID-19 pandemic. The Bermudan government partnered with a private stablecoin firm to launch the token, but insists it has no plans to issue a central bank digital currency.
The Bermudan Premier David Burt announced the new token on Twitter, describing it as a “great showcase of Fintech innovation and a step toward making payments more accessible for Bermudian entrepreneurs.”
“Bermuda is keen to establish itself as a leader in supporting innovative private-sector digital asset solutions and to work with locally licensed companies to drive digital asset adoption,” he remarked in his statement to the press.
The token was launched in partnership with Stablehouse, a Bermudan digital payments firm.
While the token has been in development since early last year, the COVID-19 pandemic heightened its need in the small island nation. With a lockdown in place, the government struggled to distribute financial aid to the citizens. The new token will make this easier, with the country’s 99% internet penetration rate making a digital currency the ideal solution.
Currently, the token is being tested in three locations with a few consumers and merchants. Once the pilot test is completed, the government intends on scaling the use nationwide. Bermudans will be able to make payments at merchant stores through a point-of-sales terminal provided by Stablehouse. The tokens will be stored on the Green Wallet app, a digital payments platform with a focus on ethical and sustainable products.
In a unique twist to most government-led token projects, the local banking system will not be involved. According to Denis Pitcher, the chief fintech adviser for the Bermudan Premier, this is because banks are bound by laws that make digital assets too risky for them. He believes that this will change in the future as regulations evolve.
Pitcher also ruled out the possibility of a CBDC in the near future for Bermuda.
“We’re not particularly interested in creating a unifying technical solution that’s going to solve all problems at digitizing money for a country, because it’s hard to see how that really can exist,” Pitcher said, according to CoinDesk.
Rather, the Bermudan government will continue collaborating with local companies to issue tokens on its behalf.
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