Bhutan relies on vast hydropower reserves, which are supplied by rivers fed by ancient glaciers. Almost all of the country’s 800,000 citizens get their electricity from this renewable resource, and it accounts for 30% of the country’s GDP.
But Bhutan’s royal government has been secretly planning a new purpose for these reserves. It is to fuel the country’s very own Bitcoin mine, which has been operating for the past few years through Druk Holding and Investments (DHI), a state-owned company.
Sustainable Bitcoin mining
The government had never publicly announced the initiative until last week. The nation has officially become another country to mine Bitcoin just like El Salvador, powered by renewable sources.
Related article: Is Bitcoin mining bad for the environment?
Several days after Forbes approached Bhutanese officials with queries regarding the mining scheme, a government representative confirmed this. The representative stated Bhutan had begun mining a few years ago as one of the early entrants when the price of Bitcoin was around $5,000.
The company has made it clear that its decision to invest in Bitcoin mining is strategic and not motivated by FOMO. Income is reportedly used to subsidize power and hardware expenditures.
“It’s important for us to look at assets that are low volume, high value, or digital assets for that matter, and try to position ourselves in a way that we can be competitive globally over time to build our economy,” Ujjwal Deep Dahal, CEO of DHI explained.
However, neither the people of Bhutan nor its international partners know about this endeavor, and it is unknown why. So why keep it a secret? An answer to this question hasn’t been found yet.
$500 million mining fund
Funding of up to $500 million is being sought by Bhutan’s investment arm and Nasdaq-listed business Bitdeer Technologies Group. The fund is supposed to help with the development of green crypto mining in the Himalayan monarchy.
The goal is reportedly to establish carbon-free digital mining that taps into Bhutan’s enormous hydroelectric power. The fundraising efforts aimed at institutional investors will begin at the end of May to get the ball rolling on this.
According to Dahal, mining is the safest way for Bhutan to take advantage of cryptocurrency potential, and thus for the time being, the country will concentrate on Bitcoin.
A combination of falling digital asset prices, higher energy costs, and stiffer competition in 2022 was a major blow to the crypto miners. However, in 2023, things are looking up thanks to the crypto market recovery and falling inflation.
As the Bitcoin halving nears, Bhutan’s economy may profit largely from the next bull run. Moreover, this is great to show the world that Bitcoin mining is not always bad for the environment.