How Bhutan is using hydropower to build a green Bitcoin economy

Key takeaways

• Bhutan uses surplus carbon-free hydroelectric power to mine Bitcoin, converting excess electricity into a liquid digital export rather than reducing production.

• Mining and conservation is managed by the sovereign investment arm, Druk Holding and Investments (DHI), and limited to designated jurisdictions, thereby limiting individual exposure.

• Officials describe mined Bitcoin as a buffer of currency liquidity that has already supported public finances.

• The central bank only allows crypto activity in a staged sandbox framework linked to Gelephu Mindfulness City, with a focus on risk control and transparency.

Bhutan’s argument to the crypto world is simple: if a country has an abundance of renewable energy and limited domestic demand, it can turn electrons into digital assets.

In practice, that’s exactly what the Himalayan kingdom is doing: using hydropower to harness industrial-scale Bitcoin (BTC) mining and developing a state-backed, values-based “green digital assets” strategy that officials say can generate hard-currency liquidity, support government spending and help develop a domestic technology workforce.

Step 1: Start with the only natural resource that evolves

Bhutan’s energy system is dominated by hydropower and electricity exports, particularly to India, are a key pillar of the economy. It would appear that Bhutan’s leaders view increasing hydropower capacity as a prerequisite for scaling their “green” crypto ambitions.

Many of the government’s own energy planning documents frame this expansion. Bhutan’s National Energy Policy 2025 cites a “techno-economically viable hydropower potential” of 33,000 megawatts (MW), based on the Power System Master Plan 2040, and positions hydropower alongside solar, wind and storage as central to long-term growth.

Similarly, a World Bank report estimates Bhutan’s feasible hydropower potential at around 33 gigawatts and notes the macroeconomic impact of recent imports of IT equipment linked to the expansion of crypto mining.

Recent announcements of cross-border projects highlight how tangible construction has become. In November 2025, India inaugurated the 1,020 MW Punatsangchhu-II hydropower project and extended a new credit line linked to deeper energy cooperation. Officials also noted that Bhutan’s domestic electricity demand is around 1,000 MW, with surplus electricity exported.

Step 2: Use surplus hydropower as “IT fuel”

Bhutan’s crypto strategy is led by Druk Holding and Investments (DHI), the commercial investment arm of the royal government.

In an interview with Reuters in April 2025, DHI CEO Ujjwal Deep Dahal said Bhutan began adding cryptocurrencies to DHI’s portfolio in 2019. He touted Bitcoin mining as a way to increase access to foreign exchange liquidity and create value from surplus hydropower.

Bhutan has used some crypto profits to help pay government salaries over the past two years, according to senior officials in Thimphu.

The partnership between Bitdeer and DHI, announced in May 2023, constitutes a key industrial lever. Bitdeer said the parties plan to launch a closed-end fund of up to $500 million to develop carbon-free digital asset mining operations in Bhutan, leveraging the country’s renewable energy and Bitdeer’s mining expertise.

Step 3: Treat Bitcoin as a Financial Buffer for a Seasonal Network

Hydroelectric systems often face a timing problem: production can increase when rivers are flooded and decrease when flows decrease.

In January 2025, Bhutan’s Gelephu Mindfulness City (GMC) project described the country’s approach as a way to monetize excess summer hydropower via “Green Bitcoin” and then convert that value back into electricity or imports when electricity is more limited. The project quotes DHI’s Dahal describing Bitcoin “strategically like a battery.”

This definition of “battery” is important because it is one of Bhutan’s most coherent arguments for why mining is not mere speculation. Instead, it is positioned alongside infrastructure, transforming otherwise diminished renewable energy production into a liquid reserve asset.

Step 4: Keep it sovereign and increasingly regulated

Bhutan’s efforts in mining and reserve creation have attracted attention because they are state-related rather than purely private. In September 2024, blockchain analytics firm Arkham revealed that it had identified Bitcoin holdings linked to the Bhutan government on its platform and characterized those holdings as coming from mining rather than seizures. However, on-chain estimates fluctuate based on price movements and wallet allocation and should not be treated as audited public accounts.

On the regulatory front, Bhutan’s central bank, the Royal Monetary Authority (RMA), has publicly signaled a controlled approach. In an April 30, 2025 notice titled “RMA Regulatory Position on Cryptocurrency,” the RMA said it would adopt a phased and targeted strategy.

The notice stated that mining and trading of cryptocurrencies would only be permitted for entities registered with GMC. Participation would also be limited to trading partners operating under the GMC.

This sandbox containment is how GMC positions itself as a special jurisdiction with its own policy toolkit and an important pillar in finance and digital assets. This framework includes a proposed blockchain-linked currency concept, “ter,” and a fully-reserved digital bank, Oro Bank.

Did you know? In 2024, Bitcoin mining operations linked to the State of Bhutan generated an estimated turnover of 750 million dollarsaccording to blockchain analysis company Arkham Intelligence.

Step 5: The “green coin” story and the risks involved

Bhutanese officials explicitly emphasize the climate aspect. For example, Dahal argued that coins mined using Bhutan’s hydropower offset coins mined with fossil energy elsewhere and contribute to the green economy.

But even in a system heavily supplied with renewable energies, these risks do not disappear:

• Volatility and budgetary risk: The price of Bitcoin can fluctuate wildly, and the use of volatile assets in public finances introduces fiscal risk, even if the holdings are built from surplus energy rather than taxes.

• Transparency: Onchain tracking is not the same as official disclosure. Audited reporting and clear governance are important when reserves are linked to the state.

• Financial crime and consumer protection: The RMA’s progressive stance and restriction of permitted activities to GMC-registered entities reflects a preference for controlled participation rather than open retail speculation.

Testing a Green Bitcoin Model

Bhutan’s green Bitcoin economy is not a meme business; it is a state-led effort to combine a new export, digital assets, with the country’s existing comparative advantage in renewable energy. The strategy uses a special jurisdiction, Gelephu Mindfulness City, alongside central bank safeguards to limit the risk of spillover.

Whether this model becomes sustainable will depend less on slogans and more on the expansion of hydropower, the disciplined management of reserves and the transparency with which the state reports what it extracts, holds and sells.