Bhutan, a small country located in South Asia, is making a significant impact in the world of cryptocurrency. With a population of approximately 770,000 people and situated between India, China, and Nepal, Bhutan has recently made headlines by adopting a crypto reserve strategy in one of its cities. This strategy includes the use of popular cryptocurrencies such as bitcoin (BTC), ethereum (ETH), and Binance’s BNB token (BNB).
While other countries, like El Salvador, have also incorporated bitcoin into their national reserves, Bhutan’s move could set an example for smaller nations. This could have a significant economic impact, as it could attract foreign investments and help mitigate the effects of foreign-exchange volatility and geopolitical uncertainty.
Phillip Shoemaker, the executive director of Identity.com, a non-profit organization that provides decentralized identity verification, believes that Bhutan’s actions could inspire other governments to follow suit. He stated, “They are coming out guns loaded to show the world what’s possible in the digital asset space by bringing in foreign companies to help take advantage of the growing global interest in crypto as a whole.”
According to a report by the World Bank in May 2021, Bhutan’s economy is relatively robust, but there are still risks that could hinder its growth. To address this, the country needs to attract more foreign investments. By creating Gelephu Mindfulness City, a special economic zone that adopts crypto, Bhutan is taking a step towards achieving this goal.
Shoemaker believes that this move could be very compelling at the international level, as it will help attract foreign investments. He also notes that Bhutan was already well-positioned for this move, as the country has a significant amount of hydropower potential. This makes it an ideal location for bitcoin mining, which requires a lot of energy. By using hydropower, Bhutan can reduce its carbon footprint and make mining more cost-efficient.
In April 2019, Bhutan started using its abundant hydropower to mine bitcoin, according to an article by Forbes. Today, the country holds over 11,000 bitcoins, worth approximately $1.1 billion, making it one of the top five countries in terms of bitcoin reserves, according to data from BitcoinTreasuries.
J, a crypto analyst, believes that bitcoin mining is an excellent tool for leveraging renewable and stranded energy sources. He stated, “Bitcoin mining, in particular, is such a good tool for leveraging various forms of renewable and stranded energy.” This further solidifies Bhutan’s position as a leader in the crypto world and sets an example for other countries to follow.
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