In an astonishing move, the government in Bermuda have said they will accept the USDC stablecoin for tax payments, according to Ciricle Blog.
This comes as part of a broader initiative from the government of Bermuda aimed at supporting the use of USD-dollar backed stablecoins and decentralized finance protocols and services.
This is a massive deal for the Circle and Coinbase-backed CENTRE Consortium, the creator of USDC.
Central banks and governments around the world have said that stablecoins could destabilize the market and it seems that may already be happening. It is hard to work out the transition mechanism in regards to how this will affect fiat USD liquidity but it is progressive to say the least. If the government cashes out of USDC into traditional fiat USD then I can’t really see this as being a problem but if they decide to hold reserves then the future for the project and indeed the dollar is unclear.
Earlier in the year, Circle became the first company in the world to receive a Class F license under their highly progressive Digital Assets Business Act. This enabled Circle to make products and operations in Bermuda that support a broad range of financial services built entirely on crypto and digital assets.
If more governments follow suit I can see there being more issues with regulation and approval around the world. This is a bold move from Bermuda and only time will tell how it pans out.
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