Key Takeaways
- • Bermuda's Digital Asset Business Act (2018) provides broad definitional coverage of "digital assets" that already encompasses tokenization activities and virtual coins, positioning the jurisdiction to regulate emerging asset classes without immediate legislative gaps.
- • The Bermuda Monetary Authority released a discussion paper on asset tokenization in November 2025, followed by feedback on March 30, 2026, confirming that tokenized assets fall within the existing regulatory framework's definition of "digital asset business."
- • Tokenization—the process of creating digital representations of traditional assets on blockchain or distributed ledger technology—represents a natural evolution of the digital asset ecosystem into mainstream finance, requiring regulatory frameworks to remain fit for purpose as the sector develops.
- • Bermuda has positioned itself as a global leader in digital asset regulation, but sustained leadership requires maintaining regulatory readiness and overt legal framework updates as technology and market participants evolve.
- • Stablecoins and asset tokenization represent two critical focus areas for Bermuda's regulatory development, requiring parallel attention to ensure comprehensive digital asset governance.
Summary
Bermuda's regulatory framework for digital assets is undergoing refinement as the jurisdiction seeks to maintain its standing as a global leader in the space. According to George McCallum, senior associate at Appleby, the convergence of traditional finance and technology—where "finance bros" and "tech bros" now operate within similar structures—has created both opportunity and regulatory complexity that Bermuda must address systematically.
The foundation for Bermuda's digital asset regulation rests on the Digital Asset Business Act of 2018, which defines "digital assets" broadly enough to capture tokenization activities and related asset representation technologies. This definitional breadth has proven prescient as tokenization has emerged as a primary mechanism for bringing traditional assets onto blockchain and distributed ledger platforms. Tokenization, defined by the Bank for International Settlements as the process of generating and recording digital representations of traditional assets on programmable platforms, represents a natural extension of the digital asset ecosystem into mainstream finance sectors.
The Bermuda Monetary Authority has demonstrated active engagement with tokenization developments through a structured regulatory feedback process. The authority issued a discussion paper on asset tokenization in November 2025, followed by formal feedback released on March 30, 2026. In both documents, the BMA confirmed that the existing definition of "digital asset business"—which encompasses issuing, selling, or redeeming virtual coins, tokens, or other digital asset forms—already covers all activities related to tokenized assets. This confirmation provides clarity for market participants operating within or considering entry into Bermuda's jurisdiction.
However, McCallum emphasizes that maintaining regulatory leadership requires continuous evolution. As tokenization and stablecoins become increasingly integrated into traditional finance products and structures, Bermuda's legal and regulatory frameworks must remain demonstrably fit for purpose at each stage of industry development. The jurisdiction's challenge lies not merely in retaining existing definitional coverage but in proactively updating guidance and regulatory interpretation as market practices and technological capabilities advance. This approach positions Bermuda to capture emerging digital asset business activities while maintaining institutional credibility with sophisticated market participants.
The foundation for Bermuda's digital asset regulation rests on the Digital Asset Business Act of 2018, which defines "digital assets" broadly enough to capture tokenization activities and related asset representation technologies. This definitional breadth has proven prescient as tokenization has emerged as a primary mechanism for bringing traditional assets onto blockchain and distributed ledger platforms. Tokenization, defined by the Bank for International Settlements as the process of generating and recording digital representations of traditional assets on programmable platforms, represents a natural extension of the digital asset ecosystem into mainstream finance sectors.
The Bermuda Monetary Authority has demonstrated active engagement with tokenization developments through a structured regulatory feedback process. The authority issued a discussion paper on asset tokenization in November 2025, followed by formal feedback released on March 30, 2026. In both documents, the BMA confirmed that the existing definition of "digital asset business"—which encompasses issuing, selling, or redeeming virtual coins, tokens, or other digital asset forms—already covers all activities related to tokenized assets. This confirmation provides clarity for market participants operating within or considering entry into Bermuda's jurisdiction.
However, McCallum emphasizes that maintaining regulatory leadership requires continuous evolution. As tokenization and stablecoins become increasingly integrated into traditional finance products and structures, Bermuda's legal and regulatory frameworks must remain demonstrably fit for purpose at each stage of industry development. The jurisdiction's challenge lies not merely in retaining existing definitional coverage but in proactively updating guidance and regulatory interpretation as market practices and technological capabilities advance. This approach positions Bermuda to capture emerging digital asset business activities while maintaining institutional credibility with sophisticated market participants.
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