The idea that a small Himalayan kingdom nestled between two rising superpowers, China and India, would become an international Bitcoin benchmark might seem far-fetched. Yet, this is exactly what Bhutan has quietly evolved into—a nation once known primarily for its peaceful Buddhist traditions has now emerged as a significant player in the world of cryptocurrency.
Unlike most countries, which build their cryptocurrency reserves through purchases or confiscations, Bhutan stands out because it produces Bitcoin. And not just any Bitcoin—it’s “green,” thanks to the country's robust hydroelectric power infrastructure. Currently, Bhutan generates between 55 and 75 Bitcoins per week, amounting to millions of dollars. The kingdom's total Bitcoin production has surpassed 13,200, placing it fourth in the world for Bitcoin reserves, behind only the U.S., China, and the U.K.
In addition to Bitcoin, Bhutan also holds smaller stakes in other cryptocurrencies like Ethereum (ETH), Binance Coin (BNB), and Polygon (MATIC). According to Arkham Intelligence, a blockchain data analytics firm, Bhutan's national cryptocurrency composite is now valued at over $820 million, a figure that continues to rise.
What makes Bhutan’s rise as an international cryptocurrency hub even more remarkable is that it has managed to do so while maintaining its core values of green growth and its unique domestic development philosophy known as Gross National Happiness (GNH). The nation has leveraged its hydroelectric power industry to drive sustainable socio-economic development, with a strong emphasis on the well-being of its people.
This small, landlocked nation—with a population of around 782,000 and a GDP of about $3 billion—has long been limited in its export potential due to a lack of access to the sea. Yet, Bhutan’s per capita income now stands at $4,010, higher than that of neighboring India. The Bhutanese government is even planning to use a portion of its growing crypto reserves to fund wage increases for the population.
For a nation ranked 133rd in the world by area and 160th by population, Bhutan’s transformation is nothing short of a colossal leap. Remarkably, Bhutan did not have electricity until 1966. However, its decision to harness its abundant water resources for electricity production has spurred rapid economic growth, with the country now exporting power even to India.
The kingdom's choice to utilize some of this electricity for Bitcoin mining could dramatically reshape its economic outlook. Despite having acquired its first Bitcoin only 3.5 years ago, the cryptocurrency has already become almost as valuable as gold for the country.
Bitcoin mining facilities have been established across Bhutan under the management of Druk Holdings, the state-owned investment arm. The largest mining site is located within the Education City project, initially designed to reduce mass immigration and youth unemployment but has since become a 24-hour Bitcoin production hub.
The focus on eco-friendly mining is further boosted by the country's hydroelectric resources, making Bhutan an ideal location for cryptocurrency production. This initiative gained momentum in May 2023 when Druk Holdings partnered with Bitdeer Technologies, a Nasdaq-listed cryptocurrency mining company based in Singapore. The goal is to produce Bitcoin without leaving a carbon footprint.
The initial $500 million investment went into building a 100-megawatt (MW) mining facility, and there are plans to expand capacity to 600 MW by 2025. These efforts will only enhance Bhutan’s reputation as a leader in the production of "green" Bitcoins.
However, this is just one aspect of the country’s rapidly evolving approach to the digital age. From a former hub on the ancient Silk Road between Tibet, the Indian subcontinent, and Southeast Asia, Bhutan is now aiming to become a model for economic transformation, with digital assets at the center of its strategy.
Druk Holdings, founded in 2007 with the mission of ensuring “the long-term benefit of the people of Bhutan,” oversees a range of investments. Its portfolio already spans industries like manufacturing, construction, mining (including magnesium and graphene), banking, aviation, drones, data centers, and, of course, cryptocurrency. Now, the focus is on green growth and new technologies, from renewable energy projects, particularly solar power, to ventures into the metaverse.
Bhutan is also exploring the possibility of launching a central bank digital currency (CBDC), with plans to integrate digital assets into the country’s traditional financial system. Analysts see this as part of a broader trend among developing countries, where cryptocurrencies are gaining ground as a way to pursue greater economic autonomy and reduce vulnerability to global economic fluctuations.
Given the volatile nature of the cryptocurrency market, Bhutan’s strategy is undoubtedly high-risk. Nonetheless, the Asian Development Bank predicts that Bhutan’s GDP will grow by 4.4% this year and could jump to 7% by 2025.
As Bhutan steps into the digital future, it continues to balance its commitment to sustainability and the happiness of its people with its ambitions as a rising player in the global cryptocurrency market.
By fLEXI tEAM
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