Bhutan's Bitcoin Reserve Surges 900% to $1.3 Billion

On June 27, the CEO of SatoshiActFund, Dennis Porter, highlighted a significant development in Bhutan's financial strategy. The Himalayan kingdom, renowned for its Gross National Happiness index, has amassed a Bitcoin reserve valued at $1.3 billion, constituting nearly 40% of its GDP. This revelation underscores Bhutan's strategic move into the digital asset realm, positioning it as a leader in crypto innovation among governments.

The initiative to mine Bitcoin originated from Bhutan's king, Jigme Khesar Namgyel Wangchuck, who sought technological solutions to bolster the economy. The country's abundant hydropower resources made it an ideal location for crypto mining, which demands substantial energy. Mining operations commenced during the pandemic, when Bhutan was isolated from the outside world. The project began with just two computers and has since expanded to four state-owned mines, capitalizing on the surge in Bitcoin's price from under $10,000 in 2020 to around $100,000 today. This growth has helped offset declines in hydropower exports and financed pay hikes for civil servants.

Bhutan's mining project has been conducted with a high degree of secrecy, with the government intentionally keeping the number of mines and operational details under wraps. The mines are strategically located in cool mountain areas near power lines, and the government established Green Digital to oversee the operation. International experts provided remote assistance, and Bitdeer Technologies, a Singapore-based mining company, built two additional mines, paying Bhutan in U.S. dollars for electricity. This partnership has bolstered the country's foreign-currency reserves. Despite concerns from some officials about transparency, the benefits of the project are evident to many Bhutanese citizens, who see it as a diversification of the economy.

Looking ahead, Bhutan plans to retain its Bitcoin reserve for the long term and upgrade existing mines rather than build new ones. The country is also exploring ways to integrate crypto into daily life. In May, Bhutan launched a payment system for tourists, enabling them to use over 100 cryptocurrencies for flights, hotels, and visas. Crypto is also set to play a pivotal role in the development of Gelephu Mindfulness City, a new special region where it will be integrated into everyday activities. Dennis Porter noted that Bhutan, despite its small size, now holds the third-largest Bitcoin reserve globally, demonstrating how a determined nation can lead in the digital age with strategic foresight and patience.