BermudAir has completed a financial move by issuing a $1m tokenised bond.

This bond was executed using a platform called Obligate, which operates on the public blockchain Polygon. Bond payments are made in a stable cryptocurrency called USDC, which is pegged to (although not backed by) the US dollar.

The airline says that investors can expect a 15-month, 15% p.a. return. BermudAir is the first airline to use cryptofinance (using cryptocurrencies and blockchain) to raise capital in the new tokenised credit markets, with XBTO acting as lead arranger and bookrunner.

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This debt financing will fund operational and resource enhancements for the airline, particularly related to route expansion, to cater to growing demand and consolidate its position in new markets.

“Even as a young airline, the funding needs of our business are rapidly evolving,” said Adam Scott, Founder and CEO of BermudAir. “Having this kind of innovative financing in the range of available options works for us. The efficiencies of using fintech to raise capital in this way are self-evident, and we’re pleased to be the first airline to do so with another Bermuda-based company that’s already so well-established in the market.”

“This milestone represents a significant first step towards enabling democratized access to funding and investment opportunities for both companies and investors alike,” said Philippe Bekhazi, CEO of XBTO. “The tokenised transaction showcases the forward-thinking approach taken by BermudAir and XBTO and sets the stage for similar future issuances. By leveraging the benefits of blockchain technology, this financing method offers increased speed, transparency, security, and efficiency.”

Launched last year, BermudAir has quickly expanded operations beyond three U.S. routes to include seven routes across the U.S. and Canada, including its latest additions Toronto, and Halifax. The airline operates over 50 flights per week on Embraer E175 aircraft featuring a dual-class cabin, with 14 seats in its business cabin and 52 seats in economy.