Bhutans Bitcoin Boom: How the Himalayan Kingdom Harnesses Hydropower for Cryptocurrency Mining

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Beneath the towering peaks of the Himalayas, Bhutan, a tiny kingdom known for measuring Gross National Happiness, hides a tech-driven secret: thriving Bitcoin mining.

In a Forbes article (published earlier today) titled The Kingdom Of Bhutan Has Been Quietly Mining Bitcoin For Years, it was revealed that Bhutan was using its abundant hydroelectric resources to mine Bitcoin. According to Forbes, rivers fed by ancient glaciers in the Himalayas provide the energy for this secret enterprise, turning Bhutan into a notable player in the crypto-mining industry.

Forbes sources say Bhutan’s plans to develop state-run mining operations began in 2020. The idea was to use the country’s hydroelectric power stations to power Bitcoin mining machines, which solve complex mathematical problems to earn bitcoin rewards. Forbes reports that Bhutanese officials recently confirmed that mining started a few years ago when Bitcoin was valued at around $5,000.

The exact details of this operation, however, remain unknown. Forbes says the Bhutanese Ministry of Finance has not provided details on the start date, location and cost-effectiveness of the programs, raising questions about its transparency.

Forbes also reports that Bhutan is in talks with Nasdaq-listed mining company Bitdeer for a possible collaboration. Forbes believes this partnership could result in a Bitcoin mining data center in Bhutan powered by 100 megawatts (MW) of electricity, significantly increasing Bitdeers’ mining capacity.

According to the Forbes report, despite being known for its commitment to Gross National Happiness, Bhutan has quietly built a substantial crypto wallet. The public holding company, Druk Holding & Investments, has reportedly invested millions in cryptocurrencies without public disclosure.

Forbes also pointed to a significant increase in computer chip imports over the past few years, hinting at the growth of Bitcoin mining in Bhutan. However, Forbes notes that concerns have been raised about the country’s trade deficit and dwindling foreign exchange reserves due to this activity.

On September 22, 2021, FinTech company Ripple announced a partnership with the Central Bank of Bhutan (aka Royal Monetary Authority) for the latter to use the Ripples CBDC solution to pilot a central bank digital currency (CBDC) in phases .

The project will use the Ripples 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 predicts that by improving the ease, speed and cost-effectiveness of domestic and international payments, it can achieve its goal of extending financial inclusion to 85% of its population. by 2023. .

Ripple’s dedication to sustainability was an important consideration for Bhutan. Ripple pointed out 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.

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