Headline: Bhutan turns surplus hydropower into state-backed “green Bitcoin” — a renewable-powered foreign-currency buffer Lead: The Himalayan kingdom of Bhutan has quietly built a state-led crypto playbook: use excess, carbon-free hydropower to mine Bitcoin, hold it as a hard-currency reserve, and run mining and custody through the sovereign investment arm inside a tightly controlled special zone. Officials call it a way to turn otherwise curtailed electricity into liquid digital exports — a “battery” for the country’s foreign liquidity needs. What’s happening - Bhutan’s commercial investment vehicle, Druk Holding and Investments (DHI), runs industrial-scale Bitcoin mining and custody on behalf of the state. Mining is limited to designated jurisdictions to reduce retail exposure and concentrate oversight. - DHI added cryptocurrencies to its portfolio starting in 2019 and has since used crypto-related profits to support government finances, including paying salaries, according to senior officials in Thimphu. - The strategy positions mined Bitcoin as a foreign-currency liquidity buffer — a tradable reserve that can be converted back into cash or imports when needed. Why hydropower matters - Bhutan’s grid is overwhelmingly hydro-powered. Domestic demand sits at roughly 1,000 MW while planned and existing generation can produce large seasonal surpluses — especially in the summer — that would otherwise be curtailed. - Government planning documents put technically and economically viable hydropower potential at about 33,000 MW (33 GW), based on the Power System Master Plan 2040 and the National Energy Policy 2025. A World Bank assessment aligns with a similar 33 GW estimate and notes the macro effects of increased IT imports tied to mining. - Practical expansion is underway: in November 2025 India inaugurated the 1,020-MW Punatsangchhu-II project and extended credit for further energy cooperation, underscoring the scale-up of exportable capacity. Industrial partnerships and finance - DHI announced a strategic partnership with Bitdeer in May 2023 to develop carbon-free digital-asset mining operations, with plans for a closed-end fund of up to $500 million to leverage Bhutan’s renewable power and mining expertise. - Onchain analytics firm Arkham Intelligence estimated Bhutan’s state-linked mining operations generated roughly $750 million in revenue in 2024, though onchain estimates can vary with price swings, wallet attribution and are not a substitute for audited public accounts. - In September 2024 Arkham flagged government-linked Bitcoin holdings that it attributed to mining activity rather than seizures — attracting attention because the reserves are state-linked rather than purely private. Gelephu Mindfulness City and the sandbox model - Bhutan routes most crypto activity through Gelephu Mindfulness City (GMC), a special jurisdiction designed to house finance and digital-asset innovation. GMC’s framing treats Bitcoin mined with surplus hydro as “green Bitcoin,” monetizing summer generation and then converting that value back when power is tight. - DHI CEO Ujjwal Deep Dahal has described Bitcoin “strategically as a battery,” emphasizing the idea of mining as infrastructure-adjacent — a mechanism to store value when electricity is abundant. - The Royal Monetary Authority (RMA), Bhutan’s central bank, has adopted a phased, sandbox-style regulatory stance. An April 30, 2025 notice said crypto mining and exchanges would be permitted only for entities registered with GMC and for business partners operating within that framework, reflecting a focus on risk control, transparency and policy containment. The pitch — and the caveats Bhutan’s message to the crypto industry is straightforward: if you have abundant renewable electricity and limited domestic consumption, you can turn electrons into digital assets — exporting value rather than curtailed power. Officials highlight climate benefits too, arguing that coins mined on Bhutan’s clean grid offset fossil-mined coins elsewhere. But significant risks remain: - Price volatility and fiscal risk: Holding Bitcoin in public finances introduces budgeting uncertainty because crypto prices can swing sharply. - Transparency and governance: Onchain activity is visible but not the same as audited, transparent accounting. Clear reporting and governance are necessary when reserves are state-linked. - Financial crime and consumer protection: Limiting activity to GMC-registered players and using a phased regulatory approach reflects a desire to prevent retail speculation and reduce illicit-finance risk. Bottom line Bhutan’s green-Bitcoin strategy is not a fringe experiment: it’s a state-directed effort to add a new digital export to a country with a structural advantage in renewable power. Whether the model scales into a durable template for other hydro-rich nations will depend on expanding dependable hydropower, disciplined reserve management, and transparent public accounting of what the state mines, holds and sells. Read more AI-generated news on: undefined/news

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