Bermuda Monetary Authority consults on guidance for recognised stablecoin use by insurers and investment funds

The Bermuda Monetary Authority has published a consultation paper on a proposed Guidance Note setting out its supervisory expectations for eligible insurance entities and investment funds that use recognised stablecoins for operational, settlement, treasury or investment-related purposes. The proposal is intended to permit defined use cases within existing regulatory frameworks while maintaining prudential, governance, anti-money laundering and anti-terrorist financing, sanctions, custody, valuation, disclosure and operational resilience safeguards. The draft guidance does not provide a blanket permission for all regulated firms to use stablecoins. Instead, applicability and any notification or approval requirements would depend on the entity, sector, use case and governing framework. It covers stablecoin eligibility, governance and risk management, along with expectations on AML/ATF and sanctions controls, custody, wallet and private-key management, valuation, liquidity and redemption risk, contractual settlement and transaction finality, disclosure and reporting, and the role of intermediaries, service providers and intra-group arrangements. Traditional special-purpose insurers are outside the proposed framework at this stage. Comments are invited until 30 September 2026. The Authority also indicated that separate guidance for parametric or other digitally enabled insurance structures could be considered once the relevant framework is finalised.