Key Takeaways
- The Bermudian dollar (BMD) is Bermuda’s official currency, pegged 1:1 with the U.S. dollar, facilitating easy trade with the U.S.
- Initially introduced in 1970, the BMD replaced the Bermudian pound, aligning Bermuda’s economy closer to the U.S.
- The BMD’s 1:1 peg with USD enables seamless usage of U.S. dollars on the island, although BMD is non-exchangeable abroad.
- Bermuda’s economy heavily relies on the U.S., accounting for about 75% of its imports and tourism.
- As a British Overseas Territory, Bermuda maintains its unique currency and legislative governance.
What Is the Bermudian Dollar (BMD)?
The Bermudian Dollar (BMD) is the official currency of Bermuda, pegged at parity with the U.S. dollar (USD) at a 1:1 ratio. Introduced in 1970, the BMD replaced the Bermudian pound and allowed Bermuda to align its economy with the United States. American currency is commonly used interchangeably in Bermuda, and tourists should be aware that the BMD is not easily exchanged outside the island.
How the Bermudian Dollar Functions
The BMD was first introduced in 1970. The preceding currency, the Bermudian pound, was equivalent the United Kingdom’s pound sterling and similarly divided at the time into shillings and pence. The transition allowed Bermuda to decimalize its currency and reorient its economy towards the larger economy of the United States.
When the BMD was introduced, the exchange rate was fixed at a rate of 2.40 BD$ to one pound sterling. The new currency circulated alongside British currency until 1972, when the BMD was officially pegged at parity with the USD.
Because the BMD is fixed to the USD, U.S. dollars can be used throughout the island of Bermuda. Other foreign currencies such as the British pound, euro, and Canadian dollars are generally not accepted for payment on the island. The U.S. dollar is the only accepted foreign currency in Bermuda, and approximately three-quarters of all Bermuda’s imports, tourists, and commerce originate from America.
Warning
Even though the Bermudian dollar is worth the same as a U.S. dollar, they are still different currencies. Credit card transactions and ATM withdrawals may come with international conversion fees.
Key Considerations for Using Bermudian Dollars
If you visit the island and need to withdraw cash from an ATM, you will receive your funds in Bermudian dollars. This is important to be aware of because as a local-only currency, the Bermudian dollar is not exchangeable or cashable by the banks of foreign countries. So if you don’t exchange any BMD back to the currency of your national residence before you depart the island, any BMD currency you bring home with you is only useful as a souvenir, at least until you return to Bermuda.
Bermuda dollar notes are available in denominations of $2, $5, $10, $20, $50, and $100. Coins are available in increments of 1, 5, 10, 25, and 50 cents, as well as a $1 coin, which replaced Bermuda’s $1 dollar note.
Historical Evolution of Money in Bermuda
Bermuda’s first formal minted currency was introduced in approximately 1615. These coins, which preceded the advent of paper currency in the country, depicted images of the wild boar that were prevalent on the island. The coins soon came to be called “hog” or “hogge money.”
Sometime later, Bermuda adopted the Spanish dollar as its national currency, which was later replaced by the pound sterling in 1842. The pound sterling remained Bermuda’s legal tender for the next 130 years until 1972, when the island nation formally pegged the BMD to the USD.
Correction–Jan. 16, 2022: A previous version of this article mistakenly stated that Bermuda was independent. In fact, it is a British Overseas Territory.
