The BMA (Bermuda Monetary Authority) has officially opened up a new round of policy and regulatory consultation for stablecoins to be used for insurance and investment securities.
According to the consultation paper, this extends to use-cases such as ILS (Insurance-Linked Securities), which package risk products like climate change catastrophe and cybersecurity bonds to investors for liquidity. For the moment, this will not include any large commercial insurance providers or underwriters.
The ILS industry is growing every year, with over $60B in deals already outstanding in 2026 – the largest to date.
Bermuda is home to Institutions like the Bermuda Stock Exchange – that currently acts as a global hub for listing over 90% of such securities – and to large investment managers, such as RenaissanceRe Capital Partners and Nephila Capital who manage around $10B and $7.7B per latest Artemis insurance provider data.
This consultation is not guaranteeing that stablecoins will be used “as fiat currency, cash, deposits or legal tender”, but is focusing on understanding better how stablecoins can work in operations, including for collateral, treasury, under ILS fund treatment, compliance standards, and more.
BMA is however requesting feedback – similar like the Bank of England and the FCA have done in the UK – to ensure that sufficient and practical commentary from the industry contributes to a pro-innovation regulation. The closing date is 30th September 2026.
Bermuda, Stablecoin Insurance, And USDC Stablecoin
Stablecoins and tokenization are able to transform various parts of traditional finance, including insurance.
Bermuda is continuing to lead a healthy regulatory effort in the sector after passing their Digital Asset Business SCPS (Single Currency Pegged Stablecoins) framework in 2024.
Several entities are currently eligible for issuance in Bermuda, including: Circle, 1Money, Agora, Cash App, Coinbase, Ensuro Re, Hashkey, Jewel Bancorp, On Re SAC, OpenEden, OSL, Wenia, Xfinance, and ZeroHash. Here is a collection of both pure-play stablecoin issuers and insurance players looking to benefit.
Importantly, the latest consultation paper clearly outlines that this will only consider “recognized stablecoins”.
In practice, this means that stakeholders involved in the process (described as transfer agents, investment funds, insurers, intermediaries, and marketplaces) will only be able to use types of stablecoins that already have regulatory clarity in Bermuda, as well as a track record in traditional collateral/trade environments.
This is where Circle’s USDC stablecoin may come into play.
Back in January, following the meeting of global leaders at Davos in Switzerland, the Premier of Bermuda had announced a partnership with both Circle and Coinbase to explore the integration of USDC domestically.
More recently, USDC stablecoin was also used in the DTCC tokenization service pilot for providing margin collateral, meaning that the emergence of stablecoin insurance in Bermuda may opt for a similar experience.
