Having invested in startups for over twenty years I have deep respect for entrepreneurs trying to build a company. It is so difficult. And more often than not, it doesn’t work out. Developing a whole country, of course, is much more difficult. Many leaders in developing countries don’t even try. They use their short time in power for their own benefit. But some leaders give their best shot. Nayib Bukele made Bitcoin legal tender in El Salvador in September 2021. Since then, the country has shown a remarkable development on so many levels.
The Bitcoin engagement in Bhutan has been rumored for a while. A few weeks ago, we learned about mining operations in Bhutan leading to a significant Bitcoin stack of around 13.000 Bitcoin. That is a lot. Bhutan is leading the world with a Bitcoin stack worth around 30% of its GDP. Per capita every Bhutanese indirectly holds almost 0.02 Bitcoin, at current prices eight times the average monthly income. All of the Bitcoin mining is done with 100% clean and renewable energy, hydro power. Bhutan is the only CO2 negative country in the world and at the same time has the largest Bitcoin stack in relation to its size. That gets Bhutan worldwide attention.
Having traveled six days through this truly beautiful country, then attending the Bhutan Innovation Forum and meeting so many great people including His and Her Majesty I learned a lot. About Bhutan, mindfulness, their development strategy and the role Bitcoin is playing. While traveling I happened to see two Bitcoin mining sites, both were fairly large.
Congratulating Her Majesty, Queen Ashi Tshering Yangdon, on their Bitcoin strategy she smiled and offered to introduce me to His Majesty, Jigme Khesar Namgyel Wangchuck, the Fifth King. During a fifteen minute conversation with him he quickly stated „Hodl, hodl, hodl“. He discovered Bitcoin around 2011. Since 2019 Bhutan is mining Bitcoin. In 2008, when His Majesty became the leader of Bhutan at the age of 28, and several times after, he clearly stated his mission: “As King, I have pledged my life and service for the wellbeing of our country and people.“ His Majesty has been working hard for sixteen years to honestly do that.
And it’s quite a challenge. The economy is running a deficit, dollars are scarce, Bhutan is highly dependent on India, a neighbor, who in 1975 made Sikkim, a neighboring Kingdom, the 16th Indian state. But India is also helping: Building roads, hydro power plants and delivering almost all the Bhutanese imports. The Indian Rupee and the Bhutanese Ngultrum are linked to each other. 70% of the Bhutan economy is based on agriculture, cost of living compared to average income is high, many young people are emigrating to Australia or Canada for better income opportunities. We have heard about domestic violence and alcohol issues, contradicting the notion of the Bhutanese being the happiest people in the world.
Like in El Salvador, Bitcoin is not the silver bullet, it is part of a bigger plan of innovation and modernization. His Majesty’s biggest initiative is building a new center for entrepreneurs, technology, and mindfulness called the „Gelephu Mindfulness City“, a multibillion dollar project in Southern Bhutan. It involves attracting a lot of foreign investments and talent. The other big initiative is Bitcoin. Building on the most significant strength of Bhutan, cheap environmentally friendly hydro power, also its main export to India, the Kingdom has stacked at least 13.000 Bitcoin, maybe more. Expecting a significant value appreciation they are for the most part hodling. Only a little is sold. Bitcoin is about wealth creation. With the Bitcoin bullrun about to happen, in this cycle Bhutan’s Bitcoin stack could exceed its GDP and even foreign debt. Bitcoin benefits exceed pure value creation: They call Bitcoin the energy battery. In winter when there is a lot less rain and India uses less energy, Bhutan can use Bitcoin to import some electricity from India. Bitcoin gives Bhutan access to hard currency like the US dollar or the Euro. Selling and importing more or less everything to and from India Bhutan is notoriously short of foreign currency.
Bitcoin mining creates technical skills. The Bhutanese are capable of running and repairing the mining rigs themselves. Bhutan easily can become a worldwide competence center for clean Bitcoin mining. The newly acquired skills can be expanded to other technical areas. For example, Bhutan implemented a digital national ID card on the Polygon blockchain. Using a wallet the Bhutanese have access to many government services. Around 20% of the Bhutanese have signed up for it. Know-how around Bitcoin and general IT can be the basis for attracting foreign tech investors and startups. Strategically, Bitcoin creates some independence from its strong and still benevolent neighbor India. China is not much of an issue for Bhutan.
His Majesty builds the Bitcoin strategy on the few but distinct assets of Bhutan such as cheap energy, very good English skills, a world leading image of mindfulness and harmony with nature, the capability of not only preserving its rich cultural traditions and history. He aims to improve the happiness of his people including, but not only, its standard of living. Clearly, Bitcoin can be the key element and driver for Bhutan’s future.
Talking about Bitcoin to government officials in Bhutan we sensed some shyness which 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 overheard the sentence “I tried to get him to sell, but he refused.” “Hodl, hodl, hodl”, is what His Majesty told me. For sure Bitcoin is creating significant benefits for the Bhutanese on top of value creation.
At age 44, after 16 years in power, His Majesty seems to have the long-term vision to develop this beautiful country in the Himalayan mountains and plenty of time to implement it. As we can see around the world, it is a hell of a job. Bitcoin, clearly, is significantly improving the odds for Bhutan.
This is a guest post by Alex v. Frankenberg. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
