Bhutan's mountainous terrain, coupled with abundant hydroelectric power reserves, position it ideally for cryptocurrency mining as the country proposes a new $500 million fund targeted toward crypto mining.
Bhutan's crypto strategyBhutan appears to have an interest in investments related to Bitcoin and other digital currencies, perhaps as a hedge against inflation and economic uncertainties.
Although Bhutan already has existing crypto mining activities on home soil -through its new crypto mining initiative- the Bhutan government plans on boosting them considerably by inviting foreign participation as well by providing several incentives such as tax exemptions; reduction in electricity rates; and simplified regulations designed specifically for the crypto mining.
Ujjwal Deep Dahal, CEO of Druk Holding and Investments, the Bhutan government’s investment arm, said of Bhutan’s latest mining venture:
“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.”
Despite being situated ideally for crypto mining activities due to its environment and infrastructure there are concerns toward the environmental impact of such operations given that many people see it as a potential threat to the environment.
However in Bhutan’s case the government has expressly stated it will guarantee that all cryptocurrency mining activities take place in an environmentally responsible manner that is consistent with its objective for sustainable development.
CBDC?While Bhutan is expending time, money, and resources on its crypto strategy, it is also hedging its bets in the traditional financial system by exploring opportunities to create a central bank digital currency (CBDC).
Such initiatives highlight cryptocurrencies' growing attractiveness among developing countries as a vehicle for driving economic prosperity.
However, it must be recognised that implementing conscientious mining practices alongside promoting sustainable development will be a determining factor for Bhutan’s mining project to succeed, while at the same time helping communities within Bhutan thrive.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
