Bermuda Permits Captive Insurers to Use Stablecoins Under New BMA Policy

According to a recent insight published by Appleby, the Bermuda Monetary Authority (BMA) now permits certain captive insurers to incorporate recognized stablecoins into their operations, subject to prior regulatory approval. The June 11, 2025 article by Brad Adderley and Ojeda Smith, titled "Bermuda Paves the Way for Captive Insurers with New Stablecoin Policy," outlines the scope and conditions of the BMA's position.

Appleby reports that captives licensed as limited purpose insurers may use "stablecoins" (a type of cryptocurrency designed to maintain a stable price) for premium collection, claims payments, and as part of their statutory capital base. These activities do not require the insurer to obtain an innovative general business (IIGB) or innovative insurer (long-term) (IILT) license. However, approval must be obtained through a formal business plan amendment submitted to the BMA.

According to Appleby, the use of stablecoins is subject to a portfolio constraint: no more than 25 percent of the captive's capital base may consist of recognized stablecoins unless the BMA provides express permission.

The BMA defines a recognized stablecoin as a digital token that maintains a stable value relative to a specific fiat currency, is fully collateralized by fiat reserves or highly liquid assets, is redeemable one-to-one from the issuer or its agent, and is attested by a recognized auditor on at least a monthly basis. Appleby notes that highly liquid assets must have maturities of 90 days or less and be convertible to the pegged fiat currency with minimal loss under normal market conditions.

Appleby states that the policy applies exclusively to captive insurance companies and does not extend to commercial insurers or captives that are consolidated into a BMA-regulated commercial insurance group. Statutory financial reporting must continue to be completed in US dollars, regardless of any stablecoin activity.

According to the Appleby insight, the BMA intends to review the policy after 12 months to evaluate its application and determine whether any adjustments are necessary.