Bhutan is rebuilding the core of its digital identity framework on Ethereum.
The initiative, confirmed by Aya Miyaguchi of the Ethereum Foundation, is part of the Himalayan kingdom’s broader experiment in emerging technologies. This indicates that blockchain, once limited to trading and tokens, is now being tested as public infrastructure.
According to Miyaguchi, this decision will allow each of the country’s approximately 800,000 citizens to have a verifiable and blockchain-secured identity that they will control directly from their devices by 2026.
This further shows how Bhutan’s identity program has evolved rapidly since 2023.
The national digital identity was initially launched through a registration ceremony by His Royal Highness Gyalsey, a symbolic gesture marking Bhutan’s entry into the digital age. This first version ran on Hyperledger, a permissioned blockchain favored for enterprise pilots.
By 2024, the government had switched to Polygon, attracted by its lower fees and zero-knowledge proofs that allow users to confirm who they are without exposing their personal data.
Yet within a year, government officials decided that migrating to Ethereum would provide the country with unparalleled decentralization and global security guarantees.
Jigme Tenzing, the secretary of the GovTech agency, was quoted as saying:
“Ethereum is one of the most decentralized blockchains in the world, making it virtually impervious to disruption. This transition strengthens both the security and stability of our digital identity.”
Why Ethereum, and why now?
Bhutan’s move reflects a global overhaul of identity management amid growing identity theft.
According to the World Bank’s ID4D dataset, nearly 850 million people worldwide still have no official ID, while another 3.3 billion have no digitally verifiable document. As a result, many remain excluded from the financial system and public services without authorization.
Governments have attempted to solve this problem with centralized databases, but these systems are expensive to maintain and notoriously vulnerable to breaches.
In the United States, 22% of Americans have been victims of identity theft, with the Federal Trade Commission (FTC) receiving more than 1 million complaints in 2023. These thefts often target older adults, resulting in losses of more than $10 billion.
Given this, Bhutan’s response is to reverse this model by allowing citizens to control their own credentials rather than entrusting them to a central registry.
Miyaguchi revealed that the new NDI will follow a self-sovereign identity architecture built on decentralized identifiers and verifiable credentials.
This way, every Bhutanese citizen will have an encrypted wallet accessible via smartphone. The wallet would store certifications such as date of birth, address or school records. This data would be verified using cryptographic proofs.
This change significantly changes the cost equation. The World Bank estimates that traditional identity programs cost between $5 and $10 per user per year, especially in low-income countries.
Bhutan’s blockchain model could bring this amount down to less than $1, depending on transaction fees and validator costs.
Additionally, Bhutan’s adoption follows growing momentum for digital ID modernization.
The United Nations Joint Staff Pension Fund recently completed a blockchain-based verification system for its 70,000 beneficiaries across 190 countries.
According to a report by the global authority, the results were striking as they led to a 40% reduction in paperwork, 95% reduction in archiving expenses and almost 100% digital retention among users.
Bhutan is aiming for a similar result but on a national scale.
How does this benefit Ethereum?
If this initiative proves successful and gains significant adoption, the project could make the country one of the first to demonstrate that public infrastructure can build on an open, permissionless chain like Ethereum.
Miyaguchi said:
“This important milestone marks not only a national achievement but also a global step towards a more open and secure digital future in the long term. »
Moreover, the initiative would also constitute a soft power victory for Ethereum itself, strengthening its image as the default settlement layer for money and metadata.
At the same time, Bhutan’s experience could accelerate the tokenization of real-world assets such as land titles, school records or professional licenses, all of which depend on a verifiable identity.
Notably, Ethereum is the dominant blockchain platform for RWA tokenization, controlling 62% of all tokenized assets, including tokenized currencies, commodities, treasuries, and others.
