Bhutan, known for prioritising Gross National Happiness, is turning to Bitcoin mining to tackle economic issues, including high youth unemployment and a recovery-hindered tourism sector from COVID-19. With excess hydropower resources, the country holds more than $600 million in Bitcoin, providing funding for civil service pay rises. This move also aligns with Bhutan’s sustainability goals, making it a calculated effort towards economic self-sufficiency.
Bhutan, a quiet Himalayan kingdom known for valuing Gross National Happiness over traditional economic measures, is taking a bold step into the world of Bitcoin. This strategy comes amid ongoing economic challenges, including high youth unemployment, constricted agricultural land, and a battered tourism sector still reeling from the effects of the pandemic.
The country’s GDP sits at approximately $3.02 billion in 2023, with tourism previously representing more than 10% of that, around $334 million. However, visitor numbers saw a nosedive during COVID-19, and recovery has been slow. Prime Minister Tshering Tobgay has indicated that Bhutan can accommodate around 300,000 tourists each year, but only 150,000 actually visited last year.
To address its economic woes, Bhutan is venturing into Bitcoin mining, leveraging its excess hydropower supply. Thanks to abundant rivers fed by melting Himalayan glaciers, Bhutan produces a significant amount of hydropower, especially during the summer months where production frequently exceeds local demand. This surplus electricity is being used to operate supercomputers that mine Bitcoin, generating fresh cryptocurrency for the nation.
Currently, Bhutan’s Bitcoin holdings stand at over $600 million, which actually makes up about 30% of its GDP, as stated by blockchain analytics firm Arkham. Besides Bitcoin, the country holds smaller investments in Ethereum and LinqAI. This shift towards cryptocurrency aligns with a growing global trend, as countries adapt to embrace digital currencies — many, in fact, are joining the crypto bandwagon at an increasing rate.
Take, for example, El Salvador, which has amassed around $550 million in Bitcoin, and the United States, which has initiated a strategic Bitcoin reserve during the Trump administration. This expansion of crypto interest isn’t restricted just to Bitcoin; there’s a notable surge in enthusiasm for alternative digital assets, including meme coins, spotlights the public’s eagerness for potential gains in the crypto market.
With Bhutan’s geographic constraints, the economic difficulties are even more pronounced. Nestled in mountainous terrain with limited arable land, the kingdom relies heavily on imports, especially food supplies from India. Moreover, Bhutan’s environmental policies enforce a minimum 60% forest cover, which creates hurdles for potential industrial growth and foreign investments.
These limitations contribute to a worrying brain drain scenario. Youth unemployment in Bhutan hit 19% in 2024, dramatically overshooting the global average of 13.6% recorded by the World Bank. Many educated Bhutanese are seeking opportunities abroad – in 2022, over 10% of the educated population emigrated, primarily to places like Australia, attracted by higher wages.
Interestingly, revenues from Bitcoin mining are offering some relief, allowing Bhutan to sell $100 million worth of cryptocurrency. This revenue boost has even facilitated a significant pay raise for civil servants, doubling wages and reducing the rate of resignations from nearly 1,900 in early 2023 to just 500 in early 2024 — a clear sign of Bitcoin’s immediate impact.
Sustainability remains a cornerstone of Bhutan’s Bitcoin mining initiative, perfectly in line with its environmental values. The country’s naturally cool climate, generally ranging between 15 to 30 degrees Celsius, reduces the need for expensive cooling systems required in other mining operations worldwide. Moreover, by choosing to mine Bitcoin instead of exporting hydroelectricity at lower tariffs, Bhutan is maximising its potential revenue.
Additionally, Bhutan is exploring other innovative ventures, such as the Gelephu Mindfulness City, which is set up as a special administrative zone that fosters sustainable development. This urban project aims to balance green business practices with residential needs, encapsulating Bhutan’s ecological and happiness-oriented priorities.
In summary, Bhutan’s foray into Bitcoin mining isn’t merely a gamble; it’s a strategic move towards economic self-sufficiency, sustainability, and halting the outflow of its talented youth. It remains to be seen how successful this initiative will be, but it’s certainly a noteworthy development in the kingdom’s economic narrative.
