Introduction to Bhutan’s Green Bitcoin Economy
Bhutan, a country known for its commitment to sustainability and renewable energy, has been quietly building a “green” Bitcoin economy. The Himalayan kingdom has been leveraging its abundant hydropower resources to power industrial-scale Bitcoin mining, with the goal of generating hard currency liquidity, supporting public spending, and developing a domestic tech workforce. In this article, we will delve into the key aspects of Bhutan’s green Bitcoin economy and explore the potential benefits and risks associated with this innovative approach.
Key Insights into Bhutan’s Green Bitcoin Economy
The Bhutanese government has been using excess, carbon-free hydropower to mine Bitcoin, converting excess electricity into liquid digital export rather than curtailing generation. The mining and custody of Bitcoin are handled by the state-owned investment arm, Druk Holding and Investments (DHI), and are limited to certain jurisdictions, thereby limiting retail risk. Officials describe the mined Bitcoin as a foreign currency liquidity buffer that has already supported government finances. The central bank, the Royal Monetary Authority (RMA), only allows crypto activities under a phased, sandbox-like framework linked to Gelephu Mindfulness City, with a focus on risk control and transparency.
Step 1: Harnessing Hydropower for Bitcoin Mining
Bhutan’s energy system is dominated by hydropower, and electricity exports, particularly to India, are a mainstay of the economy. The government’s energy planning documents frame the expansion of hydropower capacity as a prerequisite for expanding its “green” crypto ambitions. According to the National Energy Policy 2025, Bhutan has a “technically economically viable hydropower potential” of 33,000 megawatts (MW), based on the Power System Master Plan 2040. A World Bank report also puts Bhutan’s viable hydropower potential at about 33 gigawatts, highlighting the macroeconomic impact of recent imports of IT equipment related to the expansion of crypto mining.
Step 2: Using Excess Hydropower as “Computing Fuel”
Bhutan’s crypto strategy is driven by DHI, which began adding cryptocurrencies to its portfolio in 2019. DHI CEO Ujjwal Deep Dahal described Bitcoin mining as a way to increase access to foreign currency liquidity and create value from excess hydropower. Bhutan has used some cryptocurrency-related profits to pay government salaries over the past two years, according to senior officials in Thimphu. The partnership between Bitdeer and DHI, announced in May 2023, aims to launch a closed-end fund of up to $500 million to develop zero-carbon digital asset mining operations in Bhutan, leveraging the country’s renewable energy and Bitdeer’s mining expertise.
Step 3: Treating Bitcoin as a Financial Buffer for a Seasonal Grid
Hydropower systems often face a timing problem, with electricity production rising sharply during floods and falling when rivers recede. Bhutan’s approach is to monetize excess hydropower via “green bitcoins” in the summer and then convert that value back into electricity or imports when power becomes scarce. This approach positions Bitcoin as a “battery” that can store excess energy and provide a liquid reserve asset.
Step 4: Remaining Sovereign and Regulated
Bhutan’s mining and protected areas efforts have attracted attention due to their state-linked nature. The RMA has publicly signaled a controlled approach, with crypto mining and exchanges only permitted for companies registered with Gelephu Mindfulness City. Participation is limited to business partners operating under the GMC, and the RMA has proposed a blockchain-linked currency concept, “ter,” and a fully reserved digital bank, Oro Bank.
Step 5: The “Green Coin” Narrative and Associated Risks
Bhutan’s officials emphasize the climate aspect of their green Bitcoin economy, arguing that coins mined using hydropower offset coins mined using fossil energy elsewhere and contribute to the green economy. However, even in a system that relies heavily on renewable energy, there are risks associated with volatility, fiscal risk, transparency, and financial crime. The RMA’s tiered stance and limitation of permitted activities to GMC-registered companies reflect a preference for controlled participation over open retail speculation.
Conclusion: Testing a Green Bitcoin Model
Bhutan’s green Bitcoin economy is a government-led effort to link a new export, digital assets, to the country’s existing comparative advantage in renewable energy. The strategy uses a special jurisdiction, Gelephu Mindfulness City, as well as central bank guardrails to limit spillover risk. Whether this model becomes a lasting one depends on hydropower expansion, disciplined reserve management, and the state’s transparency about what it extracts, stores, and sells. For more information, visit Cointelegraph.
