Why Bermuda Will Punch Above Its Weight in the Next Decade of Onchain Finance

By Salman Banaei, General Counsel, Plume

A small island in the North Atlantic at the tip of the "Bermuda Triangle," where bankers wear shorts and knee socks to board meetings, is unlikely to be where most observers expect the next chapter of global capital markets to emerge. They should look again.

The Bermuda Monetary Authority has spent decades playing a disproportionate role in global reinsurance (a $760b+ market), asset management, and financial services more broadly, including as a pioneer in developing strictly segregated legal entity structures. The BMA has demonstrated that to support these global markets prudential rigor is non-negotiable. Over the past decade, it has done something most regulators have struggled to do at all: it has built a digital asset framework that is both rigorous and usable. That combination, prudential seriousness paired with regulatory agility, is rarer than it sounds, and it is exactly what the emerging architecture of Open Finance built on public blockchains, accessible to anyone with an internet connection, and capable of distributing institutional-grade products globally, requires

The Stablecoin Lesson

Stablecoins were the first asset class where regulated onchain finance worked at scale. The U.S. codified that with the GENIUS Act in 2025. Bermuda got there earlier, and got there differently not by writing a stablecoin-specific statute, but by applying the Digital Asset Business Act 2018 with substance-over-form judgment. Reserve requirements, AML programs, freeze-and-seize capabilities, cybersecurity standards, wind-down planning: the controls that make an instrument trustworthy at institutional scale, applied to a globally distributed, 24/7, composable financial product.  

The lesson, and the foundational premise of Open Finance, is that compliance and permissionless distribution are not opposites, provided the controls are built into the token and the issuer is supervised by a regulator that understands what is actually happening. The BMA has shown it understands.  The BMA’s strong supervisory track record and adaptable framework is why globally recognised firms like Circle, Coinbase, and Kraken have chosen Bermuda as a core location to support their global operations.  

From Stablecoins to Vault Curation for Global Onchain Capital Markets

The next question is which other financial products this pattern extends to. Plume’s answer is regulated onchain vaults. Each vault is a smart contract that accepts deposits, allocates across tokenized eligible investments, accrues yield and automatically manages redemptions queues as well as NAV updates. It is structurally what an ETF does, except every step runs on immutable code. The curator preserves investment judgment but cannot escape the structural protections embedded in the contract itself. For regulators, this produces a materially lower risk profile than traditional fund management because custody, reconciliation, and many other operational risks are eliminated at the architecture level.

The BMA has the framework to handle it. Bermuda’s DABA framework combined with the Incorporated Segregated Accounts Act 2019 lets each vault sit inside its own legally ring-fenced cell with bankruptcy remoteness and segregated reserves, with BMA oversight providing independent assurance of effective asset-liability management, liquidity planning, and AML/ATF supervision at the platform layer.   This is the supervisory model Open Finance needs: rigorous at the entity and platform level, but compatible with products that move freely across borders and chains.

The Bigger Prize: Natively Onchain Funds on Global, DeFi Rails

Bermuda has been the world's premier domicile for offshore investment vehicles for decades. The foreign feeder fund is how asset management products can be distributed globally. Port that structure onchain and the implications are significant. A BMA-regulated ISA holds shares in a U.S. master fund and issues vault tokens subject to embedded AML, sanctions screening, and continuous proof of reserves. A user anywhere in the world with a stablecoin and a screened wallet holds proportional exposure in seconds.

Financial opportunity has not caught up to the growing population of the global middle class, now up to 8 billion souls globally.  The growth of multi-trillion dollar crypto markets and stablecoins are the first proofs of unmet demand.  Onchain infrastructure ushers in the potential of “Open Finance,” where distribution and interoperability barriers imposed by legacy technology collapse: where a vault token minted under BMA supervision can be held, transferred, and used as composable collateral by anyone, anywhere, without an intermediary chain of brokers, custodians, and transfer agents standing in between.  It is imperative that as Open Finance takes shape, that it does so with the protections provided by proportionate principles-based regulation.  The BMA is well-positioned to shape that future. Open Finance does not mean unregulated finance, it means globally scaled, regulated finance with prudent safeguards to ensure universal confidence.

What Comes Next

The BMA's November 2025 Discussion Paper on Asset Tokenisation was a landmark in the development of Open Finance. Plume's January 2026 comment letter responded across thirty-plus areas, but the throughline is simple: focus on substance over form, regulate at the platform layer rather than per-product, recognize blockchain-native controls (sequencer-level transaction screening, token-embedded freeze-and-seize, onchain reserves) as compliance in their own right, build mutual recognition pathways with U.S., EU, and other regimes, and explicitly support ISA-structured vaults distributing exposure to foreign master funds.

The ETF made professional asset management available to anyone with a brokerage account. Regulated onchain vaults can make it available to anyone with an internet connection. The wrapper is changing. The protections have to scale with the global nature of onchain capital markets. Bermuda is in a position to prove that regulated Open Finance will provide the architecture to support global onchain capital markets.