Beneath the towering peaks of the Himalayas, Bhutan, a small kingdom known for measuring Gross National Happiness, hides a tech-driven secret: a thriving Bitcoin mining operation.
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 hydroelectric resources to mine Bitcoin. According to Forbes, the rivers fed by ancient Himalayan glaciers provide the power for this secretive venture, turning Bhutan into a notable player in the crypto mining industry.
Forbes’ sources indicate that Bhutan’s plans to develop state-run mining operations began in 2020. The idea was to use the country’s hydroelectric plants to power Bitcoin mining machines, 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 about $5,000.
The exact details of this operation, however, remain undisclosed. Forbes says that the Bhutanese Ministry of Finance has not provided specifics on the scheme’s start date, location, and profitability, which raises 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 boosting Bitdeer’s mining capacity.
Per the Forbes report, despite being known for its commitment to “gross national happiness,” Bhutan has been quietly building a substantial crypto portfolio. The state-owned holding company, Druk Holding & Investments, has reportedly invested millions in cryptocurrencies without public disclosure.
Forbes also pointed out a significant surge in computer chip imports over recent years, hinting at the growth of Bhutan’s Bitcoin mining operation. However, Forbes notes that concerns have been raised about the country’s trade deficit and the decrease in its foreign currency reserves due to this activity.
On 22 September 2021, FinTech firm Ripple announced a partnership with Bhutan’s central bank (aka “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 utilize 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 anticipates that by improving the ease, speed, and cost-effectiveness of both domestic and international payments, it can achieve its target of extending financial inclusion to 85% of its population by 2023.
Ripple’s dedication to sustainability was a significant consideration for Bhutan. Ripple emphasized that its CBDC solution is carbon-neutral and, being based on the public XRP Ledger, it is 120,000 times more energy efficient than proof-of-work blockchains.