Can Bitcoin Save Bhutan’s Struggling Economy?
As Bhutan navigates a challenging economic landscape characterized by a brain drain and declining tourist revenues, the kingdom is turning to an unconventional ally: Bitcoin. Nestled in the Himalayas between India and China, Bhutan has become a curious player on the global cryptocurrency stage, leveraging its abundant hydropower resources to mine Bitcoin as a means of economic revitalization.
A Unique Approach to Economic Growth
In stark contrast to traditional economic measures, Bhutan has long prioritized happiness and sustainability in its development strategies. However, with the nation facing a host of economic difficulties, including a high youth unemployment rate of 19% in 2024 and a significant decline in tourism post-COVID-19, the government is exploring new avenues to stabilize its economy.
Bhutan’s Prime Minister, Tshering Tobgay, articulated this new strategy in an interview, stating that the energy surplus from the country’s hydropower plants during the summer months allows for the profitable mining of Bitcoin. “It’s just a simple strategic choice that many people have made and earned billions of dollars, and I think governments should do it,” he remarked.
The Mechanics of Bitcoin Mining in Bhutan
For those unfamiliar, Bitcoin is a decentralized cryptocurrency created in 2008. Its mining process involves solving complex mathematical puzzles using high-powered computers, a task that requires a significant amount of energy. Bhutan, utilizing its hydropower capabilities, is well-positioned to tap into this lucrative market without compromising its environmental values.
By running supercomputers powered by its hydropower plants, Bhutan aims to generate new Bitcoins to boost its economy. As of early April 2025, blockchain intelligence reports indicated that Bhutan holds bitcoin worth over $600 million, representing approximately 30% of the nation’s GDP. This impressive figure has sparked discussions on the role of digital currency in small economies.
Addressing Economic Challenges with Cryptocurrency
Tourism has long been a pillar of Bhutan’s economy, accounting for more than 10% of its GDP. However, the pandemic severely impacted tourist numbers, which dropped from about 300,000 visitors to only 150,000 in 2023. The government’s strategy of charging a sustainable development fee of $100 for foreign tourists has also restricted visitor flow, particularly when traveling to a country that prioritizes low-volume, high-value tourism.
Moreover, Bhutan has seen a troubling exodus of its educated youth who have left for better-paying opportunities abroad. Prime Minister Tobgay highlighted this issue, explaining that competitive salaries in developed nations make it difficult for Bhutanese jobs to retain talent. In a bid to combat this trend, the government sold $100 million worth of cryptocurrency in 2023 to double public sector salaries, resulting in a slight decrease in civil servant resignations.
Bitcoin’s Role in Sustaining Economic Viability
Despite the burgeoning potential of Bitcoin, concerns remain about the volatility of cryptocurrency markets. However, Bhutan has justified its mining operations as a sustainable way to bolster economic growth without undermining its commitment to environmental stewardship. The kingdom’s commitment to maintaining high forest coverage and a holistic approach to economic development has made it cautious about rapid industrialization.
Ujwal Deep Dahal, CEO of Druk Holding and Investments, emphasized the importance of utilizing Bhutan’s green energy for Bitcoin mining alongside the continued export of hydropower to India. This dual approach allows Bhutan to maximize revenues while safeguarding its natural resources.
A Holistic Vision for the Future
Looking beyond Bitcoin mining, Bhutan is also embarking on other innovative projects, such as the Gelephu Mindfulness City—a new administrative region intended to harmonize economic development with the country’s ethos of sustainability and wellbeing. This project exemplifies Bhutan’s unique vision, blending traditional values with modern economic strategies.
In conclusion, Bitcoin represents a strategic pivot for Bhutan as it grapples with pressing economic challenges. The nation’s focus on sustainability combined with financial innovation could pave the way for a resilient and thriving economy, as it seeks to balance development with ecological integrity in the years to come.
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