Bhutan Doubles Civil Servant Salaries With $100 Million Bitcoin Sale

Bhutan, a small landlocked country in South Asia, has implemented a unique strategy to tackle its economic challenges and reduce brain drain by leveraging Bitcoin. The nation sold $100 million worth of Bitcoin in 2023 to double the salaries of its civil servants, a move aimed at retaining skilled workers who might otherwise seek better opportunities abroad. This initiative has been particularly effective in 2023 and 2024, significantly curbing the trend of workers leaving Bhutan for higher wages in developed countries.

The use of Bitcoin in Bhutan extends beyond just doubling salaries. The country has also employed the cryptocurrency to provide free healthcare and support environmental projects. However, the primary application of Bitcoin has been to finance the salaries of public workers, which has been crucial in retaining skilled labor within the country. Bhutan's Prime Minister Tshering Tobgay emphasized the importance of Bitcoin in addressing the nation's economic issues, stating that it has been instrumental in providing financial stability to public servants.

Bhutan's Bitcoin holdings have decreased from 13,000 to 8,190 in the past year, indicating that a significant portion of its Bitcoin reserves has been sold to fund public salaries. This raises questions about the sustainability of Bhutan's Bitcoin strategy in the long run. However, the country's abundant hydroelectric power resources provide a unique advantage. The excess electricity generated can be used for Bitcoin mining, which involves running supercomputers to find Bitcoin blocks and gain rewards.

Bhutan is not the only country exploring the use of Bitcoin to address economic challenges. Other nations, such as El Salvador, have adopted similar strategies, leveraging their natural resources for Bitcoin mining. However, the long-term impact of these strategies remains to be seen, as countries continue to explore the potential of Bitcoin in addressing their economic woes. The collective control of 529,000 Bitcoin by various countries suggests that continued nation-state adoption could fuel Bitcoin demand and prop up its value in the long run.