How Bhutan Is Using Hydropower to Build a Green Bitcoin Economy

key takeaways

• Bhutan is using surplus, carbon-free hydropower for Bitcoin mining, converting excess power into liquid digital exports rather than cutting production.

• Mining and custody is controlled by the sovereign investment arm, Druk Holdings and Investments (DHI), and is limited to specified jurisdictions, limiting retail exposure.

• Officials have described mined bitcoins as a foreign exchange liquidity buffer that has already supported government finances.

• Gelefu allows crypto activity only under a phased, sandbox-style framework tied to Mindfulness City, with an emphasis on central bank risk control and transparency.

Bhutan’s pitch to the crypto world is simple: If a country has abundant renewable energy and limited domestic demand, it can convert electrons into digital assets.

In practice, the Himalayan state is quietly doing exactly that: harnessing hydropower to power industrial-scale Bitcoin (BTC) mining and building a state-backed, value-driven “green digital asset” strategy that officials say could generate hard-currency liquidity, support public spending and help develop the domestic tech workforce.

Step 1: Start with the only natural resource that measures

Bhutan’s energy system is dominated by hydropower, and electricity exports, particularly to India, are a main pillar of the economy. Reportedly, Bhutan’s leadership sees the expansion of hydropower potential as a prerequisite to enhancing its “green” crypto ambitions.

The government’s own energy planning documents outline a large number of these expansions. 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 places hydropower at the center stage along with solar, wind and storage for long-term development.

A World Bank report similarly puts Bhutan’s potential hydropower potential at around 33 gigawatts and notes the broader economic impact of recent imports of IT equipment linked to crypto mining expansion.

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

Step 2: Use surplus hydropower as “computing fuel”

Bhutan’s crypto strategy is led by Druk Holdings 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 that Bhutan began adding cryptocurrencies to DHI’s portfolio in 2019. They framed Bitcoin mining as a way to increase access to foreign exchange liquidity and create value from surplus hydropower.

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

A key industrial lever is the Bitdeer and DHI partnership, announced in May 2023. 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, taking advantage of the country’s renewable energy and Bitdeer’s mining expertise.

Step 3: Treat Bitcoin as a financial buffer for the seasonal grid

Hydropower systems often face timing problems: output may increase when rivers flow fast and shrink when flows are low.

In January 2025, Bhutan’s Gelephu Mindfulness City (GMC) project described the country’s approach as a way to monetize surplus summer hydropower through “green bitcoin”, then converting that value into electricity or importing it when power is scarce. The project quotes DHI’s Dahl as describing Bitcoin as “strategically a battery.”

That “battery” framing matters because it is one of Bhutan’s most consistent arguments for why mining is not mere speculation. Instead, it is deployed as infrastructure adjacent, turning otherwise underutilized renewable generation into a liquid reserve asset.

Step 4: Keep it sovereign and increasingly regulated

Bhutan’s mining and reserve-building efforts have attracted attention because they are state-linked rather than entirely private. In September 2024, blockchain analytics firm Arkham revealed that it had identified Bitcoin holdings linked to the government of Bhutan on its platform and represented those holdings as originating from mining rather than seizure. However, onchain estimates fluctuate with price movements and wallet attribution and should not be treated as audited public ledgers.

On the regulatory front, Bhutan’s central bank, the Royal Monetary Authority (RMA), has signaled a publicly controlled approach. In a notice titled “RMA’s Regulatory Stance on Cryptocurrencies” dated April 30, 2025, the RMA said it will adopt a phased and focused strategy.

The notice states that crypto mining and exchanges will be permitted only for entities registered with the GMC. Participation will also be limited to business partners operating under the GMC framework.

This sandbox-like control matches how the GMC is being positioned as a special jurisdiction with its own policy toolkit and a key finance and digital assets pillar. That framework includes a proposed blockchain-linked currency concept, “Ter,” and a planned fully reserved digital bank, Oro Bank.

Do you know? Bhutan’s state-linked Bitcoin mining operation in 2024 Generated estimated $750 million revenueAccording to blockchain analytics firm Arkham Intelligence.

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

Bhutanese officials clearly emphasize the climate angle. For example, Dahl has argued that coins mined using Bhutan’s hydropower offset coins mined with fossil energy elsewhere and contribute to a green economy.

But even in a renewable-heavy system, these risks do not disappear:

• Volatility and Fiscal Risk: The price of Bitcoin can rise rapidly, and the use of volatile assets in public finance presents budget risks, even if holdings are created from surplus electricity rather than taxes.

• Transparency: Onchain tracking is not the same as official disclosure. When reserves are state-linked, audited reporting and clear governance matter.

• Financial Crime and Consumer Protection: The RMA’s phased approach and restriction of permitted activity to GMC-registered entities reflects a preference for controlled participation rather than open retail speculation.

Testing the green bitcoin model

Bhutan’s green Bitcoin economy is no meme business; It is a state-directed effort to promote a new export, digital assets, building on the country’s existing comparative advantage in renewable energy. The strategy uses central bank guardrails as well as a special jurisdiction, the Gelephu Mindfulness City, to limit spillover risk.

Whether this will become a sustainable model will depend less on slogans and more on hydropower expansion, disciplined reserve management and how transparently the state accounts for its mining, storage and sales.