Facing a growing economic crisis, Bhutan has sought alternatives
to strengthen its economy without compromising its environmental principles. The landlocked and mountainous country struggles to produce food and relies heavily on India for essential supplies. Although tourism contributes more than 10% of the country’s gross domestic product (GDP), the recovery from the pandemic has been slow. In 2023, the sector generated US$334 million, out of a total GDP of US$3,02 billion.
Even with a “high-value, low-volume” tourism policy — charging $100 for foreign tourists and $15 for Indian citizens — Bhutan has struggled to meet its target of 300 visitors per year. Low demand has a direct impact on job creation and government revenue.
Faced with this scenario, the government has found a way to reverse some of this economic pressure in Bitcoin mining.
Prime Minister Tshering Tobgay defends the activity as a “simple strategic choice” for countries that have a surplus of renewable energy. “It’s simply a strategic choice that many people have made, making billions of dollars, and I believe governments should do the same,” he said in an interview with Al Jazeera.
Excess hydropower, especially in the summer months, has been diverted to power cryptocurrency mining operations. This approach allows Bhutan to boost its economy with minimal environmental impact, while respecting its Constitution, which requires that at least 60 percent of the country’s land be preserved as forest. “We have been very cautious with foreign direct investment. We have ruled out companies that harm the environment, pollute the air or threaten our culture,” Tobgay added.
Additionally, Bitcoin has been used as a tool to combat talent flight.
In 2023, the government sold $100 million worth of BTC, using the proceeds to double public servants’ salaries and reduce the number of layoffs.
Today, Bhutan is among the countries with the largest sovereign Bitcoin reserves, with 7.697 BTC — equivalent to more than US$656 million — under the custody of the state-owned Druk Holdings, according to data from the Arkham platform.
At the time of publication, the price of Bitcoin was quoted at US$85.795,32, up 2% in the last 24 hours.