𝐑𝐞𝐧𝐞𝐰𝐚𝐛𝐥𝐞 𝐄𝐧𝐞𝐫𝐠𝐲 𝐏𝐨𝐰𝐞𝐫𝐬 𝐆𝐫𝐞𝐞𝐧 𝐂𝐫𝐲𝐩𝐭𝐨𝐜𝐮𝐫𝐫𝐞𝐧𝐜𝐲 𝐀𝐧𝐝 𝐁𝐥𝐨𝐜𝐤𝐜𝐡𝐚𝐢𝐧 𝐆𝐫𝐨𝐰𝐭𝐡

… 𝒍𝒆𝒗𝒆𝒓𝒂𝒈𝒊𝒏𝒈 𝒓𝒆𝒏𝒆𝒘𝒂𝒃𝒍𝒆 𝒆𝒏𝒆𝒓𝒈𝒚 𝒂𝒏𝒅 𝒃𝒍𝒐𝒄𝒌𝒄𝒉𝒂𝒊𝒏 𝒕𝒆𝒄𝒉𝒏𝒐𝒍𝒐𝒈𝒚 𝒇𝒐𝒓 𝒍𝒐𝒏𝒈-𝒕𝒆𝒓𝒎 𝒔𝒖𝒔𝒕𝒂𝒊𝒏𝒂𝒃𝒊𝒍𝒊𝒕𝒚

By Sonam Choden

Bhutan’s engagement with cryptocurrency and blockchain technology marks a shift in its development strategy, focusing on economic diversification, technological advancement, and environmental sustainability. By utilizing its renewable energy resources, particularly hydropower, Bhutan has developed a digital asset mining sector that aligns with the national development philosophy of Gross National Happiness. This move is expected to open up new sources of revenue, attract foreign investment, and support the growth of a digital economy.

The Druk Green Power Corporation (DGPC) has set a goal to achieve at least 25,000 megawatts of installed generation capacity by 2040. “Following the commissioning of the Punatsangchhu II project, Bhutan’s generation capacity will reach approximately 3,400 megawatts, with an additional 2,000 megawatts from ongoing hydropower projects. To meet the 25,000 megawatt target, the power sector plans to add 15,000 megawatts from hydropower and 5,000 megawatts from solar energy,” said a DGPC official. The plan is designed to ensure long-term energy security, accounting for seasonal fluctuations and risks associated with climate change.

During winter, Bhutan experiences a shortfall in electricity to meet domestic demand. DGPC addresses this issue through energy imports and the use of flexible hydropower generation to manage tariffs. Although electricity exports to India have decreased, the completion of new power plants is expected to reverse this trend. “To accelerate hydropower development, Bhutan has implemented a significant policy shift, allowing strategic private sector partnerships with up to 49 percent foreign investment, while retaining a 51 percent government stake,” said the official. “Furthermore, 100 percent private sector and foreign direct investments are now permitted for solar projects, which will support the energy needs of initiatives such as the Gelephu Mindfulness City.”

Bhutan’s decision to enter the digital asset mining space is largely driven by the need to diversify the economy beyond hydropower, tourism, and agriculture. “Digital asset mining, powered by the country’s renewable energy resources, offers a novel revenue stream and presents an opportunity to attract foreign capital,” said Druk Holding and Investments (DHI). Investment in blockchain technology is also seen as a key component of Bhutan’s strategy to develop a digital economy. By adopting emerging technologies, the country aims to strengthen its financial resilience.

DHI further stated that the initiative is aligned with national goals to promote technological self-reliance and expand Bhutan’s role in the global digital economy. “Investments in digital infrastructure, such as the National Digital Identity system, and the exploration of blockchain applications in governance and finance reflect this commitment,” said DHI. Bhutan’s efforts to become a sustainable destination for cryptocurrency activity also aim to position the country competitively in international markets.

DHI highlighted that Bhutan’s early entry into digital mining provided important insights. One key lesson relates to the evolution of mining difficulty and the global hash rate. Bhutan started its mining operations when global difficulty was relatively low, leading to higher digital asset yields at lower costs. “As the hash rate increased, mining became more competitive and less efficient, but Bhutan’s early participation provided strategic insights, enabling a more informed and calculated approach to future investment,” said DHI.

Another challenge has been energy variability. “Although digital asset mining has allowed Bhutan to utilize surplus hydropower, seasonal fluctuations, especially in winter, occasionally disrupt operations,” said DHI. Since mining ranks lower in Bhutan’s energy allocation priority, these disruptions underline the importance of diversifying energy sources. Bhutan is now considering reservoir systems, solar power, and battery storage to stabilize energy supply throughout the year.

Despite the volatility of digital asset markets, the project has contributed to Bhutan’s economy. “It has added to national revenue, expanded the tax base, and increased the value of domestically generated electricity,” said DHI. “The project also brings in foreign currency, mainly in U.S. dollars. In addition, it has created opportunities for local contractors, vendors, and transport operators, generating thousands of jobs both directly and indirectly.” According to DHI, revenues from this project have also supported civil servant pay revisions, indicating a wider socio-economic benefit.

Employment opportunities have also emerged for youth in technical operations, maintenance, and facility management. “To support this growth, Bhutan has established a state-of-the-art Application Specific Integrated Circuit repair and maintenance center,” said DHI. “Efforts are underway to enhance the skills of local engineers through international training and collaboration with global experts,” they added. These steps aim to build national capacity and reduce reliance on external technical assistance.

DGPC stated that all of Bhutan’s energy projects are developed under strict environmental and social safeguards in line with international standards. These guidelines meet the requirements of multilateral and commercial financial institutions. DGPC noted that only about 10 percent of Bhutan’s hydropower potential has been harnessed so far, while many countries have developed up to 70 percent of their potential with minimal environmental impact. Bhutan remains committed to maintaining rigorous safeguards as it expands its energy infrastructure.

DHI also pointed out that Bhutan’s digital asset mining operations adhere to environmental, social, and governance principles. From an environmental standpoint, the assets are powered by renewable hydropower, supporting Bhutan’s status as a carbon-negative country. “Socially, the project creates jobs, supports local businesses, and strengthens the economy through foreign currency earnings,” said DHI. “From a governance perspective, Bhutan emphasizes transparency, regulatory compliance, and ethical practices, contributing to national revenue and public services.” DHI added that Bhutan is working with international partners to certify the ESG compliance of its digital assets, which could increase their value in the market.

Bhutan’s strategy to develop the digital mining sector reflects a broader approach to align economic growth with environmental protection and social equity. By relying on renewable energy and enforcing strict regulations, the country aims to expand its digital economy without compromising its ecological or social principles. This approach reinforces Bhutan’s commitment to sustainable and inclusive development, grounded in its core philosophy of Gross National Happiness.