Bhutan, often celebrated as one of the happiest nations on Earth, has quietly emerged as a major player in the global Bitcoin landscape. With a national holdings total of 13,093 BTC, the small Himalayan kingdom ranks fourth worldwide—trailing only the United States, China, and the United Kingdom. Unlike other countries where Bitcoin reserves stem largely from seized assets or centralized purchases, Bhutan’s stash comes primarily from domestically mined Bitcoin, powered by abundant hydropower and supported by its central bank.
This strategic foray into cryptocurrency mining underscores a bold economic experiment: leveraging renewable energy and public funding to generate digital wealth. As global interest in Bitcoin intensifies, Bhutan's state-backed mining initiative offers a compelling case study in how emerging economies can harness technology and natural resources for financial innovation.
👉 Discover how nations are turning clean energy into digital gold with cutting-edge crypto strategies.
From Hydropower to Hashpower: Bhutan’s Mining Advantage
Bhutan’s geography provides two critical advantages for Bitcoin mining: low-cost hydropower and a naturally cool climate. These factors directly address the two biggest challenges in mining operations—energy expenses and hardware overheating.
The kingdom generates most of its electricity from hydropower, with surplus energy traditionally exported to India. However, instead of selling all excess power abroad at fixed rates, Bhutan began exploring higher-value uses for its clean energy. Enter Bitcoin mining.
In 2022, Druk Holding & Investments (DHI), a government-owned commercial entity, launched a 420-megawatt mining facility dedicated to Bitcoin production. This marked the beginning of a state-driven digital asset strategy aimed at diversifying revenue streams beyond tourism and energy exports.
A second, even larger 500-megawatt facility is currently under development in partnership with Bitdeer—a major global mining operator. Expected to come online by mid-2025, this expansion signals long-term commitment to scaling Bhutan’s Bitcoin output.
What sets Bhutan apart is not just the scale of its operations, but the source of its funding.
Central Bank Backing: How RMA Financed a National Mining Play
The Royal Monetary Authority of Bhutan (RMA), the country’s central bank, played a pivotal role in financing DHI’s initial mining ventures. Between August 2020 and April 2022, RMA acquired $539 million worth of dollar-denominated securities issued by DHI—effectively extending loans to fund the mining infrastructure.
This level of financial exposure represented approximately 40% of RMA’s pre-investment foreign reserves, raising eyebrows among international observers. The International Monetary Fund (IMF) highlighted concerns over reserve adequacy and governance transparency, especially since DHI did not publicly disclose its crypto mining activities until April 2023.
Despite these concerns, the investment has started yielding returns. By March 2024, DHI had already repaid part of its obligations to RMA and distributed $33 million in special dividends** to the government. An additional **$64 million in dividends is expected during the 2024–2025 fiscal year. In response, RMA agreed to extend the maturity of the outstanding DHI securities by two years.
Moreover, DHI’s involvement with Bitdeer is structured conservatively: rather than taking equity stakes, it earns revenue by selling electricity to the mining facility at premium rates compared to domestic consumers. This model reduces direct exposure to Bitcoin price volatility while still capitalizing on growing global demand for hashpower.
Economic Impact: Bitcoin as a Strategic National Asset
Bhutan’s nominal GDP for 2023–2024 stood at approximately $3.12 billion**, according to IMF data. With 13,093 BTC valued at around **$823 million (based on a $63,000 BTC price), Bitcoin holdings now represent roughly 26% of the nation’s GDP—a staggering figure that reflects both ambition and risk.
For a small economy reliant on imports and foreign aid, Bitcoin offers a potential hedge against currency depreciation and a new form of sovereign wealth accumulation. If prices remain stable or rise, Bhutan could see substantial gains that bolster public finances and reduce debt burdens.
However, this strategy is not without challenges. The IMF cautions that Bitcoin’s price volatility introduces uncertainty into fiscal planning. For DHI to service its debts comfortably and turn a profit, Bitcoin must sustain prices near $60,000 or higher. Should prices drop significantly, RMA retains the right to liquidate crypto assets if reserves fall below constitutional thresholds.
Additionally, there are questions about domestic electricity allocation. While Bhutan exports surplus power, increased mining activity may affect future energy availability for industrial or residential growth. Balancing crypto ambitions with broader development needs remains a key policy challenge.
FAQ: Understanding Bhutan’s Bitcoin Strategy
Q: How did Bhutan become one of the top Bitcoin holders?
A: Through state-funded Bitcoin mining operations powered by low-cost hydropower. Most of its 13,093 BTC were mined domestically via government-backed projects led by Druk Holding & Investments (DHI).
Q: Is Bhutan using taxpayer money to buy Bitcoin?
A: No direct purchases. Instead, the central bank (RMA) financed mining infrastructure through loans to DHI. Revenue comes from mining rewards and electricity sales to mining facilities.
Q: How does Bhutan compare to El Salvador in Bitcoin adoption?
A: While El Salvador adopted Bitcoin as legal tender, Bhutan focuses on mining and asset accumulation. It holds more than double El Salvador’s reported BTC reserves (5,882 BTC), but does not use it as currency.
Q: What risks does Bhutan face with this strategy?
A: Major risks include Bitcoin price volatility, strain on foreign reserves, lack of early transparency, and potential competition for electricity resources between miners and other sectors.
Q: Could other countries replicate Bhutan’s model?
A: Yes—especially nations with excess renewable energy. Countries with cool climates and cheap hydro, geothermal, or solar power could follow suit by converting surplus energy into digital assets.
Q: Who benefits from Bhutan’s Bitcoin earnings?
A: Profits flow back to the government through dividends paid by DHI. These funds can support public spending, debt reduction, or reinvestment in technology and infrastructure.
A Model for Sustainable Crypto Development?
Bhutan’s journey into Bitcoin mining illustrates how small nations can leverage natural advantages to participate in the digital economy. By aligning clean energy, public investment, and strategic risk-taking, it has positioned itself at the forefront of state-level crypto innovation.
While risks remain—particularly around financial stability and governance—the early results suggest a viable path forward for resource-rich but capital-constrained economies.
As global attention shifts toward sustainable blockchain solutions, Bhutan’s story may inspire others to explore how green energy can power not just homes, but entire digital economies.