Bhutan Government Cryptocurrency Policy Changes: A Practical Cryptocurrency Guide for Informed Decisions

Mainland Bhutan — Supervised by the Royal Monetary Authority (RMA)

The Royal Monetary Authority (RMA) is Bhutan's central bank and controls the country's financial system. Under the RMA's oversight, crypto businesses can operate only within Gelephu Mindfulness City (GMC). People across the rest of Bhutan cannot buy crypto through local banks. These restrictions help protect the country's currency, the Ngultrum (BTN), which is linked to the Indian Rupee.

The RMA has signaled a controlled, phased approach to cryptocurrency regulation. In an April 2025 notice titled "RMA's Regulatory Stance on Cryptocurrency," the central bank said it would adopt a phased and focused strategy[reference:10][reference:11]. This cautious stance reflects Bhutan's broader commitment to financial stability and its Gross National Happiness ethos[reference:12].

Gelephu Mindfulness City (GMC) — The Special Economic Region

Gelephu Mindfulness City (GMC) is a Special Administrative Region (SAR) in southern Bhutan with its own legal and financial system. It is the only place in Bhutan where crypto mining and exchange businesses can legally operate. GMC was designed to serve as a regulated hub for digital asset businesses, offering crypto-friendly policies, faster licensing, and tax benefits to attract global companies.

The SAR represents a deliberate effort to create a controlled gateway for firms seeking access to a new crypto and fintech jurisdiction while preserving regulatory credibility[reference:17]. This dual structure allows Bhutan to experiment with crypto innovation in a contained environment while protecting the broader economy from potential risks.

Green Bitcoin Mining

Bhutan's Bitcoin mining began around 2019, when DHI quietly started converting surplus hydroelectric energy into BTC[reference:18]. The timing was deliberate—Bitcoin was trading at relatively low prices, and DHI saw an opportunity to monetize electricity that would otherwise go unused or be sold cheaply to neighboring India[reference:19].

Bhutan's geography provides a structural advantage: glacial rivers running off the Himalayas power a nearly 100% renewable energy grid, and the high-altitude mountain air naturally cools mining hardware[reference:20]. By 2022, DHI had expanded to at least four operational mining sites[reference:21]. At its operational peak, the program was generating an estimated 55 to 75 BTC per week—all of it carbon-neutral, making Bhutan's operation genuinely unique in the global mining landscape[reference:22].

However, mining operations appear to have paused around November 2024, according to Arkham Intelligence on-chain analysis[reference:23]. The last bitcoin inflow exceeding $100,000 occurred more than a year ago, leading to speculation that the government may have stopped mining due to declining profitability[reference:24]. DHI has stated that the country continues to upgrade equipment and maintain mining operations, supported by early and stable rains that keep hydroelectric plants at high capacity[reference:25].

Bitcoin Holdings and Reserve Strategy

At its peak in late 2024, Bhutan's government Bitcoin holdings reached approximately 13,000 BTC, valued at over $1.4 billion at the time[reference:26]. This placed Bhutan among the world's top sovereign Bitcoin holders[reference:27].

In December 2025, during the National Day Address, His Majesty the King announced: "To provide a strong financial backing, from the Bitcoin mining project which we so carefully undertook a few years ago, 10,000 BTC, valued at around one billion US Dollars, will be allocated to GMC as a long-term strategic reserve"[reference:28]. The announcement positioned Bitcoin as a national asset, similar to foreign reserves or strategic financial instruments, rather than a speculative commodity[reference:29].

Since early 2026, on-chain data from Arkham Intelligence has shown significant outflows from Bhutan-linked wallets. By mid-2026, holdings had reportedly declined to approximately 3,100 BTC[reference:30][reference:31]. The government has transferred over $230 million in BTC since the start of 2026[reference:32]. However, DHI officials have disputed claims of sales, with CEO Ujjwal Deep Dahal stating: "I don't recall the last time we sold any BTC"[reference:33][reference:34]. The sovereign wealth fund has not confirmed sales nor disputed Arkham's wallet labeling[reference:35][reference:36].

Vision and Purpose

GMC is envisioned as more than an economic zone; it is designed as a global model for mindful development, where technology, finance, spirituality, and sustainability coexist[reference:43]. The project seeks to redefine what a modern city can be, integrating digital assets into the economic ecosystem while aligning with Bhutan's Gross National Happiness philosophy[reference:44].

Within GMC, digital assets are already being integrated into the economic ecosystem. Crypto payments are being enabled for businesses and tourism, while a clear and modern regulatory framework is being developed to attract international fintech and digital asset partners[reference:45].

Key Developments

In 2026, GMC accelerated its development with a series of regulatory milestones:

• January 2026: GMC began implementing its first phase of digital asset licensing, outlining eligibility standards for exchanges, custodians, tokenization platforms, and blockchain infrastructure providers.
• February 2026: Authorities released updated AML and KYC expectations for firms seeking authorization within GMC, aligning local standards with global best practices.
• March 2026: Bhutan expanded discussions with international financial institutions and blockchain firms to establish Gelephu as a regional fintech and tokenization hub.
• May 2026: GMC introduced consultation papers on tokenized securities, digital asset investment funds, and cross-border digital payments.
• May 2026: GMC launched an accelerated licensing pathway for globally regulated digital asset firms[reference:50].

Accelerated Licensing Pathway

In May 2026, GMC introduced a streamlined licensing mechanism that integrates regulatory approval with banking access[reference:52][reference:53]. Companies that incorporate and receive a license in the city are automatically provided with a corporate bank account through DK Bank[reference:54]. The new procedure allows firms to swiftly transition from application to operational activity[reference:55].

Firms already licensed in major financial hubs such as Singapore, Hong Kong, or Abu Dhabi are eligible for accelerated registration[reference:56][reference:57]. As GMC's Board Member Jigdrel Singay explained: "In most jurisdictions, licensing and banking are separate, sequential processes—often resulting in months of delay... In GMC, they are integrated"[reference:58].

Tax Incentives

GMC offers a comprehensive tax framework designed to attract real business activity, capital formation, and long-term investment[reference:59]. Key incentives include:

• 0% corporate tax for select companies in priority sectors, contingent on investment levels[reference:60]
• Zero capital gains tax[reference:61]
• Zero dividend tax[reference:62]
• Zero inheritance tax[reference:63]
• Territorial taxation principle—taxes only on domestic income[reference:64]
• Foreign tax exemptions through 2030[reference:65]

"GMC is designed to remove friction from the system. If a company has already demonstrated credibility in leading jurisdictions, we recognize that—and enable them to move faster," said Jigdrel Singay[reference:66].

TER Gold-Backed Token

In December 2025, Bhutan launched TER, a sovereign-backed digital token fully collateralized by physical gold reserves[reference:67]. The token was launched on the Solana blockchain and represents another pillar of Bhutan's digital strategy alongside Bitcoin reserves[reference:69]. TER is also used in Bhutan's digital nomad visa program, which requires applicants to place a refundable $10,000 equivalent deposit in TER tokens[reference:70].

Central Bank Digital Currency (CBDC) Pilot

The Royal Monetary Authority (RMA) has initiated a pilot programme for a central bank digital currency (CBDC) in a controlled and experimental environment[reference:71][reference:72]. The RMA is partnering with Ripple to pilot a digital version of the Ngultrum, focusing on both technological and policy-level exploration[reference:73].

The pilot is testing retail, cross-border, and wholesale payment use cases for a digital ngultrum using Ripple's sustainable blockchain technology[reference:74]. The initiative aims to modernize Bhutan's financial system, enhance rural banking access, and curb cross-border remittance dependency[reference:75]. The RMA intends to conduct user acceptance testing, final evaluation, soft launch, and full national rollout as part of the CBDC program[reference:76].

National Digital Identity

Bhutan is also developing a blockchain-based national digital identity, with plans to migrate to Ethereum by 2026[reference:77]. This initiative is part of broader digital-economy strategies under the 13th Five-Year Plan[reference:78].

Note: This table reflects the policy framework as of mid-2026. Regulations continue to evolve. Always verify current rules through official channels.

This scenario illustrates how GMC's streamlined framework can benefit regulated crypto firms seeking new markets. However, each company's circumstances will differ, and professional advice is essential.