A tiny nation squeezed between China and India within the Himalayas, Bhutan has become an unexpected cryptocurrency hotbed. The kingdom may be more used to making travel pages for its bucolic landscapes and Buddhist monasteries, but it has now jumped into the cryptosphere after firm Arkham Intelligence revealed that state-owned conglomerate Druk Holdings has 13,011 more bitcoins. Double the amount declared by El Salvador’s Vice-Chancellor (5,877). At current prices, the stockpile is worth about $780 million, which represents $1,000 in bitcoins per citizen for a population of about 780,000 inhabitants.

Arkham points out that this small fortune has come from the bitcoin mining operations of Bhutan’s investment arm, the aforementioned Druk Holdings, a name that means “Thunder Dragon.” This dragon appears on the country’s flag, holding jewels as a symbol of wealth. Arkham notes, “We were able to confirm the history of the mining activities with satellite images of the construction of the facilities. The largest of these infrastructures is located at the base of the failed Education City, which authorities have identified as migration.” tried to deal with and reduce unemployment, but it has ended up with Bitcoin factories operating 24/7 instead of classrooms and books.

“Unlike most governments, Bhutan’s bitcoins come not from asset seizures by law enforcement agencies, but from bitcoin mining operations, which have increased dramatically since early 2023,” Arkham said. Tells. Bhutan is now ranked fourth among the countries with the most bitcoins, behind only the US, China and the UK.

Details of Bhutan’s bitcoins became known this week, but the country’s intentions were revealed some time ago. In such an inaccessible and remote corner of the world, it would not be unusual for this information to remain secret for years as the Bhutanese authorities keep their frenzied mining activities under wraps. However, Forbes revealed the location of the facilities using satellite images after Bhutan’s ties to the crypto universe were exposed by the bankruptcies of crypto lenders BlockFi and Celsius, which it said had small amounts of money. was submitted.

Along with the bitcoins in their possession, Bhutanese authorities have about $35 million in Ethereum – a decentralized blockchain and development platform – $3 million in BNB – the Binance token – and $20,000 in the Polygon blockchain platform.

One of the few pieces of information about Bhutan’s mysterious crypto drift came to light in May 2023 when Singapore-based Nasdaq-listed Bitdeer Technologies explained in a statement that it had invested $500 million with Druk Holdings. What is an agreement for Kari to develop with? Green cryptocurrency mining. The country’s hydroelectric potential, which allows it to access clean, abundant and cheap energy, ideal for mining, has given it a competitive edge. Only chip and hardware imports were needed to get the project going.

The end of crypto winter – as the period of low bitcoin prices has been dubbed – has also helped Bhutan realize its potential. It took more than a year to get back above $30,000 after the 2022 crypto crisis, which is less than half of the high of $69,000 in November 2021. The $780 million worth of bitcoin is significant for a country with a GDP of nearly $3 billion. The Bhutanese government is considering selling part of its reserves to raise wages.

Gross national happiness

While the government in El Salvador has been opposed to investing public money in bitcoins, public perception in Bhutan seems to be more favorable. A survey of business students conducted by Universal Journal of Financial Economics The country showed that 91% were aware of the existence of cryptocurrencies, and sentiment was overwhelmingly in favor.

But the state investment strategy goes far beyond digital assets: it includes infrastructure, energy, and technology like drones and data centers, not to mention physical mines to extract magnesium or graphene. The Asian Development Bank predicts that Bhutan’s GDP will grow by 4.4 percent this year and 7 percent in 2025.

As for Bhutan’s relationship with India, one of its two neighboring countries, trade is a priority: the exchange of goods – except for electricity – has nearly tripled in a decade, from 2014 to 2014. From $484 million in 2015 to $1.6 billion in 2022-23, accounting for about 73 percent of Bhutan’s total trade, according to Indian government data. Bhutanese enjoy better living conditions than their Indian neighbors, with a per capita income of $4,010 compared to $2,730.

The plunge into the crypto universe is a surprise, as the country has traditionally been more focused on spiritual issues than mundane things like money. In the late 1970s, Bhutan’s fourth king, Jigme Sange Wangchak, wanted to move his kingdom away from a frenzy of economic development and create an impression that would soon lead to a calm, peaceful and happy life for its inhabitants. Be synonymous. “Gross national happiness is more important than gross domestic product,” he said. Now, his heirs have turned Bhutan into something more than a spiritual retreat, where money matters.

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