For years, Bhutan has measured its economic and social development using uncommon currencies: happiness and sustainability.

But amid growing economic pains and a brain drain, the small, landlocked Himalayan kingdom is adopting a new emblem of progress, which is propelling Bhutan into a leading role

Bhutan, the small, landlocked Himalayan kingdom, is best known for measuring its economic and social development using uncommon currencies: happiness and sustainability.

But amid growing economic pains and a brain drain, the country is adopting a new emblem of progress, which is propelling Bhutan into a leading role, globally, in embracing financial innovation: Bitcoin.

Nestled between India and China, Bhutan – also the first country in the world to become carbon negative– has mined millions of dollars in the world’s most popular cryptocurrency in recent years, making an economic bet that almost no other country has, to the same extent.

So, why is Bhutan going big on Bitcoin? How is it mining the energy-intensive cryptocurrency? How much wealth in Bitcoin does the country hold? And is its move risky, given the wild fluctuations in prices that the digital currency has witnessed over the years?

What is Bitcoin and how do you mine it?

Bitcoin is the first decentralised, peer-to-peer cryptocurrency, created in 2008. It is not controlled by any government.

People can buy and sell cryptocurrencies like Bitcoin, and these transactions are recorded on a shared ledger called a blockchain. Bitcoin has value because there is a finite number of Bitcoins that can exist on the blockchain, about 21 million. Most of these coins have been mined and approximately 1 million remain.

Bitcoin mining is the process through which new Bitcoins are officially added to the blockchain. To mine Bitcoin, an energy-guzzling supercomputer needs to solve a complex puzzle. This adds a new digital coin into circulation.

How is Bhutan mining Bitcoin?

Bhutan’s hydropower plants fuel supercomputers that solve complex problems to be rewarded with Bitcoin, which can be added to the blockchain.

“It’s just a simple strategic choice that many people have made and earned billions of dollars, and I think governments should do it,” Bhutanese Prime Minister Tshering Tobgay said.

Tobgay explained that during the summer months, there is more water flow and the hydropower plants generate more energy than needed.

“That’s where Bitcoin mining makes tremendous sense,” said Tobgay.

Why is Bhutan facing an economic crisis?

The country is in the midst of mounting economic challenges, and Bitcoin mining is among a set of steps the nation is taking to fight its way out of the crisis.

The country has no outlet to the sea, and although – at a little more than 38,000 sq km (14,672 sq miles) – it is almost as big as Switzerland, most of this land is not arable due to its mountainous terrain. Bhutan imports most of its food from India, which Tobgay described as the kingdom’s “closest friend and neighbour”.

The International Monetary Fund (IMF) estimates Bhutan’s gross domestic product (GDP) to be $3.52bn in 2025. Based on this, tourism contributes about 3.4 percent to the country’s GDP.

However, after COVID-19 shook the industry, Bhutan has struggled to draw people back to visit its mountains, forests and Buddhist shrines.

Bhutan has long controlled how many tourists it hosts to ensure that its pristine ecology is not affected by a higher footfall than it can manage. It charges a sustainable development fee of $100 to foreign tourists. The only exception to this rule is tourists from India, who have to pay $15. Tobgay says the vision behind this is to attract “high-value and low-volume” tourists.

But now, Bhutan is struggling to get even the limited numbers of tourists it wants. According to Tobgay, the country can host approximately 300,000 tourists every year.

“Last year, I think about 150,000 tourists visited,” the prime minister said.

Bhutan’s youth unemployment rate was 19 percent in 2024. The global average youth unemployment rate in 2023 was 13.6 percent, according to the World Bank.

How might Bitcoin help Bhutan fight its economic challenges?

One of the most potent symptoms of Bhutan’s crisis is the exodus of young, educated people to other countries in recent years – and their departure only compounds the country’s economic struggle.

In 2022 alone, more than 10 percent of Bhutan’s skilled and educated population left the country.

Australia, one of the major destination countries, saw its Bhutanese immigrant population more than double in five years between 2016 and 2021.

“We have jobs in Bhutan but they cannot compete against the wages that they can earn elsewhere in developed countries,” Tobgay said.

This brain drain has also depleted Bhutan’s civil services. There was a sharp increase in civil servants quitting the system services since 2019, with the number of civil servants quitting