Bhutan’s Bitcoin Boom: How the Himalayan Kingdom Harnesses Hydropower for Crypto Mining
Beneath the high peaks of the Himalayas, Bhutan, a small kingdom known for measuring gross national happiness, hides a technology-driven secret: a booming Bitcoin mining industry.
In an article by Forbes (published earlier today) titled “The Kingdom Of Bhutan Has Been Quietly Mining Bitcoin For Years,” it was revealed that Bhutan has been using its abundant hydropower resources to mine Bitcoin. According to Forbes, the rivers fed by ancient Himalayan glaciers power this secretive venture, making Bhutan a notable player in the crypto mining industry.
Forbes’ sources indicate that Bhutan’s plans to develop state-run mining began in 2020. The idea was to use the country’s hydropower plants to power Bitcoin miners, which solve complex mathematical problems to earn Bitcoin rewards. Forbes reports that Bhutanese officials recently confirmed that mining had begun a few years ago when Bitcoin was valued at around $5,000.
However, the exact details of this operation remain undisclosed. Forbes says the Bhutanese finance ministry has not provided details of the scheme’s start date, location and profitability, raising questions about its transparency.
Forbes also reports that Bhutan is in talks with Nasdaq-listed mining company Bitdeer for a potential collaboration. Forbes believes this partnership could result in a Bitcoin mining data center in Bhutan powered by 100 megawatts (MW) of electricity, significantly increasing Bitdeer’s mining capacity.
According to the Forbes report, despite being known for its commitment to “gross national happiness”, Bhutan has been quietly building a significant crypto portfolio. The state-owned holding company, Druk Holding & Investments, is said to have invested millions in cryptocurrencies without public disclosure.
Forbes also pointed to a significant increase in computer chip imports in recent years, hinting at the growth of Bhutan’s Bitcoin mining industry. Forbes notes, however, that concerns have been raised about the country’s trade deficit and the decline in foreign exchange reserves due to this activity.
On September 22, 2021, FinTech firm Ripple announced a partnership with the Central Bank of Bhutan (aka the “Royal Monetary Authority”), with the aim of the latter using Ripple’s CBDC solution to pilot a central bank digital currency (CBDC) in phases.
The project will use Ripple’s Central Bank Digital Currency (CBDC) solution to facilitate efficient retail, cross-border and wholesale transactions for a digital Ngultrum.
According to Ripple, the Royal Monetary Authority (RMA) of Bhutan expects that by improving the ease, speed and cost-effectiveness of both domestic and international payments, it can achieve its goal of expanding financial inclusion to 85% of the population by 2023.
Ripple’s dedication to sustainability was an important factor for Bhutan. Ripple emphasized that its CBDC solution is carbon neutral and, based on the public XRP Ledger, is 120,000 times more energy efficient than proof-of-work blockchains.
