Nestled in the Eastern Himalayas, Bhutan has long been known for its unique approach to development, prioritizing Gross National Happiness (GNH) over Gross Domestic Product (GDP) and sustainability over industrial expansion. However, amid mounting economic pressures, the small constitutional monarchy has made an unexpected and bold pivot: embracing Bitcoin as a key component of its economic strategy.
Amid rising youth unemployment, a brain drain, and a declining civil service workforce, Bhutan is leveraging its abundant hydropower resources to mine Bitcoin, using the proceeds to fund government salaries, public services, and environmental initiatives.
Bhutan has been quietly mining Bitcoin using surplus electricity generated from its hydroelectric power plants since 2019. These mining operations are powered entirely by renewable energy, making Bhutan’s cryptocurrency production one of the most environmentally friendly in the world. The cold Himalayan climate further reduces operational costs by minimizing the need for cooling systems for the energy-intensive supercomputers in the mining process. According to blockchain analytics firm Arkham, this strategic use of green energy has enabled Bhutan to accumulate over 10,635 Bitcoins, currently valued at approximately $660 million. This reserve places Bhutan among the top five state-bitcoin-holders globally, alongside nations like El Salvador and the United States.
The Bhutanese government’s approach to Bitcoin is distinct from speculative investment. Prime Minister Dasho Tshering Tobgay has emphasized that Bitcoin is being used as a practical financial tool rather than a trading asset. In 2023, Bhutan sold $100 million worth of cryptocurrency to double civil servant salaries, to stem the rising tide of resignations from government positions. The impact was immediate; in the first quarter of 2024, only 500 civil servants resigned, compared to nearly 1,900 in the same period the previous year.
According to Tobgay, while some of the Bitcoin revenue has been directed towards free healthcare and environmental protection, the primary focus remains on sustaining the public sector and ensuring institutional continuity. This shift to digital assets comes at a critical time for Bhutan. The country’s economy, while bolstered by tourism and hydropower exports, has struggled to regain momentum following the COVID-19 pandemic. In 2023, tourism generated $334 million, but the number of visitors remained well below target levels. Bhutan has long pursued a “high-value, low-volume” tourism policy, charging foreign tourists a $100 sustainable development fee, while offering a reduced rate of $15 for Indian nationals. Despite these efforts to protect the country’s ecological integrity, the recovery has been slow, and economic diversification remains a pressing need.
Bhutan’s geographical and infrastructural constraints compound the challenges. Its mountainous terrain makes large-scale agriculture and manufacturing unfeasible, leading to heavy import dependence, especially from India. Youth unemployment reached 19 percent in 2024, exceeding the global average of 13.6 percent. This economic stagnation has driven thousands of educated Bhutanese to seek opportunities abroad, with countries like Australia seeing a surge in Bhutanese immigrants. Between 2016 and 2021, the Bhutanese population in Australia more than doubled. In response, Bhutan’s leadership has begun to pursue broader digital transformation goals.
Based in Islamabad, the writer has done his Masters in Defence and Strategic Studies. He can be reached at daniyaltalat2013@gmail.com
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