Bitcoin in Bhutan: Charting Its Own Course of Economic Development

by

As I pen this piece, my heart is filled with admiration for the tiny kingdom nestled in the Himalayas – Bhutan. Having had the privilege of visiting twice and witnessing its unique blend of ancient traditions and modern innovation firsthand, I find myself captivated by its audacious pursuit of happiness over wealth.

In the ongoing discussion about digital currencies, Bitcoin is increasingly being integrated into national policies. Headlines were made when El Salvador became the pioneer in recognizing Bitcoin as a legal tender, while the United States contemplates establishing a national Bitcoin reserve. Even China, known for its cautious approach towards cryptocurrency, has adopted blockchain technology to bolster its digital yuan. Amidst these shifts, Bhutan distinguishes itself – not by mirroring global trends, but by blazing its own trail.

Situated amidst the majestic Himalayas, sandwiched between China and India, Bhutan stands apart from standard economic structures. Unlike many nations that emphasize Gross Domestic Product (GDP), this unique country assesses prosperity through Gross National Happiness (GNH), prioritizing citizen well-being. Under the guidance of King Jigme Khesar Namgyel Wangchuck, Bhutan is incorporating blockchain and Bitcoin into its blueprint for sustainable growth. Notable endeavors such as developing a “Mindfulness City” in Gelephu reflect Bhutan’s innovative strategy to blend technology, culture, and environmental responsibility.

In the past few years, I’ve had the good fortune of traveling to Bhutan twice, and ever since my initial arrival, I’ve felt an unbreakable bond with this remarkable nation. During my stay in Thimphu, Bhutan’s tech park, I participated in numerous discussions about the “Mindfulness City” project and gained insights into Bitcoin mining within Bhutan. Although the country has been secretive regarding its Bitcoin mining activities, its growing curiosity towards this technology is clear. What sets Bhutan apart is not only its dedication to preserving ancient customs but also its courage in adopting cutting-edge technologies as means to further its distinctive development vision.

Bitcoin Mining: A Quiet Revolution in the Himalayas

Druk Holding and Investments (DHI) and Green Digital Limited (GDL), investment entities of Bhutan, initiated Bitcoin mining when the price was approximately $5,000. Currently, Bhutan’s Bitcoin reserves surpass a billion dollars, positioning it as one of the significant sovereign holders of digital assets, based on Bitwise Europe’s estimates. As per World Bank data from 2023, these holdings comprise about 34.48% of Bhutan’s $2.9 billion GDP, demonstrating the country’s strategic deployment of cryptocurrency as an economic resource, signifying its smart use in their economy.

In a planned progression, Bhutan is enhancing its mining facilities in collaboration with Bitdeer Technologies Group, utilizing a multi-stage development blueprint. The initial phase, boasting a 100 megawatt capacity, is currently active. The subsequent stage aspires to incorporate an additional 500 megawatts by the middle of 2025. This project leverages Bhutan’s plentiful hydropower resources, ensuring environmentally friendly and efficient mining operations. A $500 million fund created with Bitdeer in May 2023 signals Bhutan’s intention to draw foreign investment and boost its standing in the international Bitcoin mining marketplace.

As a crypto investor, I’ve embarked on an exciting journey in Gedu, Bhutan, where I’m part of the team constructing the nation’s initial large-scale Bitcoin mining venture, a 100-megawatt data center. This project harnesses Bhutan’s abundant hydroelectric power to mine Bitcoin responsibly and sustainably. Currently, we have 30,000 mining machines humming away, yielding approximately three to five Bitcoins every day – translating to daily earnings of around $317,400 to $529,000 at current prices.

Mindfulness City: A Blueprint for the Future

The “Mindfulness City” located in Gelephu serves less as a typical urban center and more as an ambitious transformation initiative designed to align with Bhutan’s long-term aspirations. During his National Day address on December 17, King Jigme Khesar Namgyel Wangchuck emphasized the project’s objective of providing prospects for Bhutanese youth, motivating them to stay in their homeland instead of pursuing opportunities overseas. As the King pointed out, striking a balance between economic advancement and the protection of Bhutan’s natural charm, cultural heritage, and core values is essential.

Spanning approximately 2,500 square kilometers, Mindfulness City is a forward-thinking urban area that seamlessly blends sustainable growth with advanced technologies such as blockchain and AI. Its strategic position at the intersection of South Asia and Southeast Asia makes it a focal point for economic activity. As a Special Administrative Region (SAR), the city endeavors to draw in both domestic and foreign investment by providing a business-friendly atmosphere.

The project is centered around seven primary areas: agritech, finance, education, renewable energy, health, technology, and spirituality. Bhutan aims to blend technological advancement with its cultural traditions by broadening its economic scope. Notably, Matrixport, a global provider of crypto financial services, has submitted an application for a Financial Services Permission License to function within Mindfulness City. This makes Matrixport the inaugural applicant under the city’s novel regulatory system for financial services and digital assets. This action underscores Bhutan’s intentions to establish a regulated ecosystem for digital currencies and blockchain, thereby supporting its objective of drawing international players while preserving its dedication to eco-friendly and culturally sensitive growth.

Happiness as an Economic Paradigm

Bhutan prioritizes happiness over traditional economic metrics, a unique perspective that sets it apart. Since the 1970s, they have used the Gross National Happiness (GNH) system to assess national prosperity, considering factors like health, education, social wellbeing, and ecological balance. This comprehensive approach aligns with blockchain technology’s potential for fostering fairer, transparent systems.

Utilizing blockchain technology, Bhutan can bolster its Gross National Happiness (GNH) objectives by fostering transparency in public undertakings and guaranteeing equitable resource allocation. To demonstrate this, Bhutan creatively transformed its “Education City” into a Bitcoin mining center, showcasing the potential for technology to address local requirements while spurring global advancement.

Bhutan’s small size doesn’t hinder its ability to excel in cutting-edge technologies. With a mere 700,000 people, the country can swiftly enact policies and adapt to new situations. One unique example is Bhutan’s implementation of hydropower for Bitcoin mining, which showcases eco-friendly practices within the cryptocurrency sector on a global scale. This method not only lessens the environmental impact of mining but also aligns with Bhutan’s dedication to environmental conservation.

In their progress towards national development, the King’s vision paves a distinct route, merging traditional practices with contemporary ideas. The concept of a “Mindfulness City” embodies Bhutan’s aspiration to establish a flourishing community where technology caters to its citizens and upholds its distinctive cultural heritage values.

For the global community, Bhutan’s adoption of blockchain and Bitcoin presents an alternative view of success — one that prioritizes well-being over profit. In a world of rapid technological change, Bhutan shows how technology can promote sustainable growth while preserving cultural identity. This innovative approach proves that even small nations can lead by example, demonstrating how technology can benefit humanity rather than divide it.

Note: The views expressed in this column are those of the author and do not necessarily reflect those of CoinDesk, Inc. or its owners and affiliates.

Read More

2024-12-19 20:05