Bhutan's Crypto Experiment: A Year Later, Reality Check

$1.4 Billion in Bitcoin, Zero Tourist Transactions

Nine months ago, Bhutan made headlines as the first country to launch a nationwide crypto payment network for tourists. Over 1,000 merchants signed up within the first month, ready to accept payments in 100+ cryptocurrencies via Binance. Today, those QR codes are gathering dust.

"It's been four to five months, but no customer has used it," says Sonam Dorji, who works at a handicraft store in Thimphu's Le Meridien hotel. "No one knows we accept cryptocurrency."

This isn't just one merchant's story—it's the reality across Bhutan's capital.

The Government's Bitcoin Gamble

Bhutan's crypto push isn't random. The kingdom has been mining bitcoin since 2019, leveraging its abundant hydroelectric power to build the world's largest state-backed green-mined bitcoin reserve—worth $1.4 billion as of October 2024.

"Mining bitcoin gives Bhutan a currency to purchase imports that it didn't have before," explains Jay Zagorsky, professor at Boston University's Questrom School of Business. "I understand why the political establishment wants digital payments. But just because the central bank is pushing doesn't make it sensible."

The infrastructure reality tells a different story:

• One-third of Bhutanese people are illiterate
• Power cuts occur 19 times per year for the average customer
• One-fifth of businesses need backup generators

Following El Salvador's Footsteps?

El Salvador made bitcoin legal tender in 2021, only to reverse course in 2025 when the IMF had to bail out its tanking economy. The Central African Republic also abandoned its bitcoin experiment within a year after pressure from international financial institutions.

Bhutan's approach differs slightly—crypto payments convert instantly to ngultrum, the local currency, acting more as a gateway than a store of value. This reduces volatility risk but doesn't solve the adoption problem.

At Ambient Cafe, one of Thimphu's oldest eateries, owner Junnu Chhetri says some foreign guests have used crypto payments, but she doesn't track daily usage.

The Gray Zone Reality

"There's nothing clearly written or formalized on paper regarding crypto laws in Bhutan," says Ugyen Dendup, co-founder of NoMindBhutan, the country's first AI startup. "It exists in a gray area: Some people push for it, some are cautious, and guidance isn't clear."

The conversation remains limited to tourism, with no significant expansion to other sectors nearly a year later.