Bhutan to allocate 10 thousand Bitcoins for the development of a futuristic "Mindfulness City"
Bhutan is investing 10,000 Bitcoins (worth about a billion dollars) from its national cryptocurrency reserve into the development of "Gelephu Mindfulness City". The small Himalayan kingdom hopes that this city will become a national economic hub, writes the BBC.
Photo: Baron Reznik / Getty Images
Bhutan is a small, landlocked Himalayan country, nestled between two giants, India and China.
The population is predominantly Buddhist and numbers about 700 thousand people. It is primarily an agrarian country with few natural resources and almost no industry. The export of electricity, mainly hydropower, to India is a key sector of the Bhutanese economy.
The government promotes a policy prioritizing "gross national happiness" over economic growth, but, as AFP notes, this does not help it cope with mass unemployment, due to which thousands of young people are forced to leave the country.
The state is trying to change this trend and attract foreign investment.
The country promotes hydropower projects, generating significant income from electricity exports to India, while also using cheap electricity to develop cryptocurrency mining, especially Bitcoin.
Bhutan began actively acquiring cryptocurrency back in 2019. According to the World Bank, in 2021-2022, the state-owned company Druk Holding and Investments (DHI) invested $539 million – almost a fifth of the total GDP – in cryptocurrency operations.
Since then, the country has accumulated significant cryptocurrency reserves, though their exact value is not disclosed. According to Arkham Intelligence, the kingdom currently holds 5,984 BTC worth over $522 million, ranking seventh globally among sovereign Bitcoin holders.
In 2023, the government announced plans to create "Gelephu Mindfulness City" – a special economic zone in the south of the country, near the border with India.
The city itself, named Gelephu, already exists; it was founded in 2010, and now it is planned to be developed as a carbon-neutral urban project.
Bhutan's King Jigme Khesar Namgyel Wangchuck stated in 2023 that Gelephu would become a "mindfulness city that integrates conscious and sustainable business, inspired by Buddhist spiritual heritage."
"As your king, I must ensure that every Bhutanese is a custodian, participant, and beneficiary of GMC," he stated earlier this year, on Wednesday, in a speech commemorating the country's national day. "In support of this policy, I announce today the allocation of up to 10,000 Bitcoins, with a total value of approximately 1 billion dollars. For the sake of our people, our youth, and our nation."
This year, GMC designated Bitcoin, Ethereum, and BNB as strategic reserves; in May, it partnered with Binance Pay to enable crypto payments in the tourism sector and integrated the national digital identification system with Ethereum.
Thus, Bhutan became the first country to establish a nationwide identification system on a public blockchain.
Last week, GMC launched TER — a digital token backed by gold, on the Solana blockchain. Bhutanese DK Bank serves as its exclusive distributor.
GMC board member Jigdrel Singay reported to Decrypt that Bhutan does not plan to sell Bitcoins and anticipates their value to grow.
"The approach will be determined in the coming months. Among the options being considered are using the kingdom's Bitcoin reserves as collateral, treasury and yield management strategies with controlled risks, and deliberate long-term holding aimed at preserving and protecting the value of digital assets," he explained.
Bhutan hopes to combine high-tech innovations with Buddhist spiritual traditions, while making the economy more technological and at the same time remaining "in harmony" with Buddhist values.
Representatives of the "Mindfulness City" say that the initiative will contribute to job creation, economic development, and strengthening "national resilience."
Bhutanese citizens from all dzongkhags (regions) will be able to participate in the project: a new land policy will consider them as shareholders of the project.
"Imagine GMC as a company, and landowners as its shareholders," said the king. "Since most of the land belongs to the state, Bhutanese from all dzongkhags will participate in its success."
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