Bhutan Leverages Hydropower for Green Crypto Mining to Boost Economy

Bhutan, a Himalayan Kingdom known for prioritizing happiness over monetary wealth, is now exploring innovative ways to leverage its abundant hydropower resources for mining green cryptocurrencies. This strategy aims to boost the nation's economy, create jobs, and address the significant issue of brain drain among its youth.

The Kingdom of Bhutan, nestled between India and China, is charting an unconventional economic course by harnessing its clean hydropower to mine "green" cryptocurrencies. The nation’s sovereign wealth fund, Druk Holding and Investments Ltd (DHI), views this initiative as a potentially lucrative investment and a vital tool to diversify the economy, generate employment, and combat the worrying exodus of its young, educated populace.

Ujjwal Deep Dahal, the chief executive of Bhutan’s sovereign wealth fund, outlined the nation’s unique approach. Green cryptocurrencies, unlike their more energy-intensive counterparts often reliant on fossil fuels, are mined using renewable energy sources. For Bhutan, this means leveraging its status as a country running entirely on clean hydropower. Dahal explained that every digital coin mined in Bhutan using hydropower offsets a coin that would otherwise be mined using fossil fuels, thereby contributing to the green economy. DHI, which also controls the country’s primary power generation utility, began incorporating cryptocurrencies into its investment portfolio back in 2019. Dahal described the move as both a “tactical investment” and a potential “gamechanger” for the nation, long renowned for prioritizing its unique Gross National Happiness (GNH) index over traditional GDP metrics. This index considers factors like sustainability and well-being alongside economic output.

The crypto mining operations involve using energy-intensive supercomputers, powered entirely by Bhutanese hydropower, to generate digital assets for the blockchain. Beyond revenue, the initiative aims to address pressing domestic challenges. Bhutan, with a population of around 800,000, is grappling with significant “brain drain.” Government estimates suggest over 10% of its young people emigrated between 2022 and 2023, contributing to a youth unemployment rate of 16.5% in 2024. DHI sees the burgeoning digital asset sector as a potential solution. Dahal stated that Bitcoin has not just given more value to hydropower energy but has also increased access to liquidity in foreign currency. Training Bhutan’s youth in “blockchain and AI techniques would fuel jobs.” Furthermore, officials are exploring an intriguing avenue: positioning Bhutan’s verifiably “green” coins as attractive assets for large corporations seeking to meet their environmental, social, and governance (ESG) targets. This could create a premium market for Bhutanese-mined cryptocurrencies.

However, the success and scalability of Bhutan’s green crypto ambitions hinge critically on significantly expanding its hydropower infrastructure. Analysts note that realizing the vision of becoming a global hub for green digital currency requires moving beyond the current generating capacity of approximately 3.5 gigawatts towards harnessing a potential estimated at 33 gigawatts. Dahal acknowledged this necessity, outlining concrete expansion plans. “We have plans to generate 15 gigawatts in the next 10 to 15 years,” he added, signaling a long-term commitment to building the energy foundation required for this innovative economic diversification strategy. The kingdom is thus embarking on a journey where sustainable energy and cutting-edge digital finance intertwine, aiming to secure both economic prosperity and the well-being of its future generations.

Bhutan’s prime minister Tshering Tobgay has recently described state-backed Bitcoin mining as a smart strategy where people have earned billions of dollars. He also stressed that governments should get involved in crypto mining too and recognise its potential for economic growth. The country’s king, Jigme Khesar Namgyel Wangchuck, has been a strong advocate for investing in digital infrastructure to fuel future growth.

Unlike many governments that acquire Bitcoin through seizures from criminals, Bhutan’s Bitcoin holdings are from government-backed mining operations. Governments are now embracing Bitcoin as recently US President Trump announced a strategic Bitcoin reserve while El Salvador holds nearly $550 million in BTC. Other countries like the Central African Republic and France are also recognizing Bitcoin as legal tender, signaling a shift in global financial strategies.