Having invested in startups for over twenty years, I have a lot of respect for entrepreneurs trying to build a company. It’s very difficult. And more often than not, it doesn’t work. Developing the whole country, of course, is very difficult. Most leaders in developing countries don’t even try. They use their short time in power for their own benefit. But some leaders are doing their best. Nayib Bukele made Bitcoin legal tender in El Salvador in September 2021. Since then, the country has shown remarkable progress on so many levels.
Bitcoin involvement in Bhutan has been rumored for a while. A few weeks ago, we learned about a mining operation in Bhutan that leads to a significant Bitcoin stack of about 13.000 Bitcoin. That’s a lot. Bhutan leads the world with a Bitcoin stack worth about 30% of its GDP. Per capita each Bhutanese indirectly holds about 0.02 Bitcoin, at current rates eight times the average monthly income. All Bitcoin mining is done with 100% clean and renewable energy, hydropower. Bhutan is the only CO2 negative country in the world and at the same time has the largest Bitcoin stack for its size. That gets Bhutan attention all over the world.
After traveling for six days in this truly beautiful country, I attended the Bhutan Innovation Forum and met many famous people including His Majesty and His Majesty and learned a lot. About Bhutan, reflection, their development strategy and the role Bitcoin plays. While I was walking I saw two Bitcoin mining sites, both of them were very big.
Congratulating Her Majesty, Queen Ashi Tshering Yangdon, on their Bitcoin strategy she smiled and promised to introduce me to Her Majesty, Jigme Khesar Namgyel Wangchuck, the Fifth King. In a fifteen minute conversation with him he immediately said „Hodl, hodl, hodl“. He discovered Bitcoin around 2011. As of 2019 Bhutan is mining Bitcoin. In 2008, when Her Majesty became the leader of Bhutan at the age of 28, and several times after that, she clearly stated her mission: “As a King, I am committed to my life and work for the well-being of our country and people.” His Majesty has worked hard for sixteen years to do that faithfully.
And it’s quite a challenge. The economy is facing a shortage, dollars are in short supply, Bhutan is very dependent on India, a neighbor, who in 1975 made Sikkim, a neighboring State, India’s 16th state. But India is also helping: Building roads, power plants and bringing almost all of Bhutan’s goods. The Indian Rupee and the Bhutanese Ngultrum are linked. 70% of Bhutan’s economy is based on agriculture, the cost of living compared to the average income is high, many young people migrate to Australia or Canada for better earning opportunities. We have heard of domestic violence and alcohol issues, which contradict the idea that Bhutanese are the happiest people in the world.
As in El Salvador, Bitcoin is not a silver bullet, it is part of a larger system of innovation and modernization. His Majesty’s biggest initiative is to build a new entrepreneurship, technology, and intellectual center called „Gelephu Mind City“, a multi-billion dollar project in Southern Bhutan. It involves attracting more foreign investors and talent. Another big step is Bitcoin. Building on the most important energy of Bhutan, cheap environmentally friendly hydro power, and its main export to India, the Kingdom has accumulated at least 13,000 Bitcoin, maybe more. They expect a significant amount of appreciation from the majority of their catchers. Less sold. Bitcoin is about creating wealth. As the Bitcoin bullrun is about to happen, in this cycle Bhutan’s Bitcoin stack may exceed its GDP and foreign debt. Bitcoin’s benefits go beyond pure value creation: They call Bitcoin an energy battery. In winter when there is very little rain and India uses less energy, Bhutan can use Bitcoin to import some electricity from India. Bitcoin gives Bhutan access to hard currency such as the US dollar or the Euro. Selling and importing more or less everything to and from India Bhutan is notoriously short of foreign exchange.
Bitcoin mining builds technical skills. The Bhutanese know how to run and repair the mining rigs themselves. Bhutan could easily become the world’s center of excellence for pure Bitcoin mining. Newly acquired skills can be extended to other areas of expertise. For example, Bhutan has implemented a digital national ID card on the Polygon blockchain. Using the wallet, Bhutanese have access to many government services. About 20% of Bhutanese are registered. How to know about Bitcoin and IT in general can be the basis for attracting foreign technology investors and startups. Strategically, Bitcoin is creating some independence from its tough and still benevolent neighbor India. China is not a big problem for Bhutan.
His Majesty built the Bitcoin strategy on the few but unique assets of Bhutan such as cheap energy, excellent English skills, the world’s leading image of thinking and harmony with nature, the ability not only to preserve rich culture and history. He aims to improve the happiness of his people including, but not limited to, their standard of living. Clearly, Bitcoin can be an important factor and driver of Bhutan’s future.
Talking about Bitcoin to government officials in Bhutan we heard some shyness that makes a lot of sense. Bitcoiners don’t brag about it. Bhutan still needs a lot of help from developed countries and international organizations. At the conference I heard the phrase “I tried to get him to sell, but he refused.” “Hodl, hodl, hodl”, is what His Majesty said. Bitcoin certainly creates significant benefits for Bhutanese in addition to value creation.
At the age of 44, after ruling for 16 years, His Highness seems to have a long-term vision to develop this beautiful country in the Himalayas and plenty of time to use it. As we see around the world, it is hard work. Bitcoin, obviously, greatly improves the prospects of Bhutan.
This guest post is by Alex v. Frankenberg. The opinions expressed are entirely their own and do not reflect those of BTC Inc or Bitcoin Magazine.
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