Bhutan's Bitcoin Reserves Surge to 40% of GDP with Green Mining

Bhutan has amassed over 13,000 Bitcoin, valued at approximately $1.3 billion, which constitutes about 40% of its GDP. This significant holding places Bhutan in the third position globally for government-owned Bitcoin reserves, trailing only the USA and the UK. Unlike other nations, Bhutan's reserves were not acquired through seizure or purchase but were mined using the country's abundant hydropower resources, which operate entirely on clean energy.

The journey of Bhutan's Bitcoin mining began in late 2020 with the installation of two small units by Druk Holding & Investments near Dochula Pass. Despite the challenges posed by a pandemic-induced border closure, the initial team managed to learn from online resources and even assembled the necessary hardware themselves. By 2022, Bhutan had expanded its operations to four government mines, with plans to scale up to at least six sites by 2025. These mining operations are often conducted discreetly to ensure security.

Bhutan's use of hydropower for Bitcoin mining is noteworthy as it acts as an energy battery during peak production times. This approach not only leverages the country's renewable energy resources but also positions Bhutan as a leader in green crypto mining. The government has previously sold $100 million worth of Bitcoin to fund salary increases for civil servants, which has helped to slow down emigration and provide substantial fiscal relief.

Looking ahead, Bhutan plans to scale its hydropower capacity from the current 3.5 gigawatts to potentially 15-33 gigawatts over the next decade. This expansion will enable a massive increase in mining capacity, further solidifying Bhutan's position in the crypto industry. The country has also branded its mining operations as green crypto, emphasizing the use of renewable energy to offset coal-based mining practices elsewhere.

Beyond mining, Bhutan is also developing Gelephu Mindfulness City, a futuristic crypto region where Bitcoin and other digital currencies will be used for various services, including travel, real estate, banking, and city services. The vision includes issuing a gold-backed digital currency and launching a full-reserve digital bank to support the project. This ambitious initiative underscores Bhutan's commitment to integrating crypto into its economic framework.

While Bhutan's foray into crypto has yielded impressive results, the volatile nature of the industry poses potential risks to the country's financial stability. However, given its small population of 786,000, Bhutan's achievements in the crypto space are noteworthy and reflect a strategic approach to leveraging its natural resources and technological capabilities.