Bhutan is quietly turning its hydropower surpluses into Bitcoin — and treating the coins as a new kind of export and liquidity buffer rather than a speculative bet.
How it works
- Bhutan’s power system is overwhelmingly hydro-based. Domestic demand sits around 1,000 MW while reported feasible hydropower potential is huge — the government’s National Energy Policy 2025 and the Power System Master Plan 2040 put a techno-economically viable figure near 33,000 MW (the World Bank gives similar estimates). That gap between potential and local consumption leaves seasonal surplus electricity that can be monetized.
- Instead of curtailing excess generation in high-water months, the state has been using surplus, carbon-free electricity to run industrial-scale Bitcoin miners. Officials and executives describe mined Bitcoin as a “battery” — a liquid reserve that can be sold for hard currency when power is tight or used to support government spending.
Who’s running it
- Mining and custody are handled by Druk Holding and Investments (DHI), the royal government’s sovereign investment arm. DHI began adding cryptocurrencies to its portfolio in 2019, according to CEO Ujjwal Deep Dahal.
- Operations are concentrated in designated jurisdictions, chiefly the Gelephu Mindfulness City (GMC) project, and tied to a sandbox-style regulatory framework set by the Royal Monetary Authority (RMA). That keeps retail exposure limited and channels activity through registered GMC participants only.
Industry partnerships and scale
- Bhutan has pursued industrial partners. In May 2023 DHI announced a partnership with Bitdeer that included plans for a closed-end fund of up to $500 million to develop carbon-free mining operations using Bhutan’s renewable power and Bitdeer’s mining expertise.
- The hydropower buildout is tangible: India inaugurated the 1,020-MW Punatsangchhu-II project in November 2025 and extended credit lines for deeper energy cooperation. Bhutan exports electricity—largely to India—making power-driven crypto an export play as well as a domestic liquidity tool.
State-backed reserves and public finance
- Bhutan’s leaders portray mined Bitcoin as a foreign-currency liquidity buffer. Senior officials say crypto-related profits have helped pay government salaries in recent years. Onchain analysts have identified government-linked wallets and estimated meaningful mining revenue: blockchain analytics firm Arkham Intelligence estimated roughly $750 million in revenue from state-linked mining in 2024 (onchain estimates vary with price and wallet attribution and should not be treated as audited accounts).
Regulation and containment
- The RMA’s April 30, 2025 notice laid out a cautious, phased approach: crypto mining and exchanges are permitted only for entities registered with GMC, and activity is restricted to approved business partners operating under GMC’s framework. GMC itself is being positioned as a special jurisdiction with policy tools for finance and digital assets, including proposals for a blockchain-linked currency called “ter” and a fully reserved digital bank, Oro Bank.
The green argument — and the counterarguments
- Officials emphasize the climate angle: coins mined with Bhutan’s hydropower are promoted as “green Bitcoin,” offsetting emissions from fossil-fuel-mined coins elsewhere and channeling renewable energy into value creation.
- But risks remain. Using a highly volatile asset in public finance introduces budgeting and fiscal risk. Onchain visibility is not the same as audited public disclosure, so governance and transparency matter. And concentrating state-linked crypto activity creates potential vulnerabilities around financial crime and consumer protection — the very reasons the RMA favors a sandboxed, limited rollout.
Why it matters
Bhutan’s approach reframes a familiar equation: abundant renewable power + limited local demand = an opportunity to turn electrons into liquid digital assets. The strategy is not a private “meme trade” but a state-directed effort to graft a digital-asset export onto an existing comparative advantage in renewables. If it scales, the model could offer a template for other renewable-rich, small economies — but its durability will hinge on continued hydropower expansion, disciplined reserve management and clear, audited transparency about what the state mines, holds and sells.
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