Bhutan Mines Green Crypto To Boost Jobs And Economy

Bhutan, the Himalayan nation between India and China, is making a daring move into mainstreaming green cryptocurrencies in its national economic plan. The nation, which has plenty of hydropower resources, is planning to mine digital currencies sustainably—smoothing its economy, generating jobs, and stemming the brain drain of young talent that takes its nationals abroad.

In a Reuters interview, Ujjwal Deep Dahal, the CEO of Bhutan's sovereign wealth fund Druk Holding and Investments Ltd., described the nation's distinct strategy. "We are a country that operates 100% on hydropower," Dahal said. "Each digital coin we mine in Bhutan with hydropower cancels out that coin that gets mined with fossil fuel." He added that each coin made within Bhutan's borders is part of the global green economy, making them stand out from cryptocurrencies mined with traditional, environmentally destructive sources of energy.

Green cryptocurrencies, technically defined by the sector, refer to those being mined from renewable energy—solar, wind, or hydropower—and not fossil fuel. In the case of Bhutan, the clean energy-mined activities not only prove friendly to the environment but are strategically beneficial too. Dahal claimed the sovereign fund started investing in cryptocurrencies since 2019 as a tactical diversification for the economy of the country and an entry into foreign liquidity.

Investments in cryptocurrencies have already paid off for Bhutan. The profits from these investments were high enough that the government was able to use them to pay salaries for two years, according to two senior government officials in the capital, Thimphu. These developments show how seriously Bhutan is looking into digital assets as a long-term economic asset class.

The economic philosophy of Bhutan is guided by its Gross National Happiness (GNH) approach, which is a sustainable measure of development that focuses on emotional well-being, sustainability, and recreation as much as on traditional economic indicators. The use of hydropower to power supercomputers that generate blockchain-based digital assets is in tune with the nation's values of sustainability and environmentally friendly development.

The concept is picking up momentum in Bhutan's policy community, particularly as the government and fund managers consider the prospect of selling these green cryptocurrencies to multinational companies. Big conglomerates, facing growing pressure to be Environment, Social, and Governance (ESG) compliant, may buy Bhutan's green-mined coins to balance emissions produced by coins mined elsewhere from fossil fuels.

Furthermore, Dahal stressed the worth of cryptocurrency mining added to the country's hydropower industry. "Bitcoin hasn't only provided additional value to hydropower energy, but it has also enhanced access to foreign currency liquidity," he declared. This greater valuation of green energy also creates incentives for investing in hydropower infrastructure.

The transition to digital assets is also envisioned as a possible answer to Bhutan's acute demographic crisis: a brain drain of its educated young people. Between 2022 and 2023, over 10% of Bhutan's youth are estimated to have emigrated overseas in search of superior opportunities, adding up to a 16.5% youth unemployment rate in 2024. Educating young Bhutanese in blockchain, cryptocurrency, and artificial intelligence is envisioned as a means of generating high-skilled local employment and preventing this outflow.

For Bhutan to fully realize its ambition of becoming a hub for green digital currency, significant expansion in its hydropower capacity is essential. The country currently has a capacity of around 3.5 gigawatts, but plans are underway to generate up to 15 gigawatts over the next 10 to 15 years. Long-term projections suggest the potential to harness as much as 33 gigawatts, further cementing Bhutan’s capacity to support large-scale, sustainable crypto mining operations.

The journey forward can be daunting, considering the technical, financial, and regulatory nuances of cryptocurrency markets. Nevertheless, Bhutan's rare combination of abundant clean energy, progressive leadership, and devotion to sustainable development places it well. If Bhutan succeeds, it can not only rewrite its economic course but also become a global model for green digital innovation.