From this point of view, Bukele seems to be in two camps: he is moving forward with his plans for a “crypto-nation”, but at the same time reaching an agreement with the International Monetary Fund. Despite these conditions, Bukele can be seen as a precursor of “anarcho-capitalism”, which is also making way in other nations: from Argentina with Milei, to the United States with Trump’s second term; who named Paul Atkins as the next head of the Securities and Exchange Commission (SEC).
And Bhutan?
Unlike El Salvador, little has been said about the role of cryptocurrency in the Himalayan state, mainly due to its extremely small size: less than $3 billion of the economy of a nation with only 800,000 inhabitants. However, it is precisely this aspect that makes it extraordinary and strategically relevant. Firstly, the investment of the monarchy led by Jigme Wangchuck is higher than that of El Salvador: Bhutan has more than 12 thousand bitcointwice as much as the Salvadoran countryworth 1.2 billion dollars; almost half of its entire gross domestic product (GDP). This after selling 367 bitcoins, earning $33 million.
Another notable aspect is the strategic importance that bitcoin have started sourcing from Bhutan, especially after the collapse of tourism revenues during Covid. Since 2019, Bhutan has focused on this digital currency: not limiting itself to buying and selling, but also dedicating itself to bitcoin mining; the validation of the transactions carried out in the blockchain, after which the coins are obtained.
According to Forbes, Bhutan harnesses its water resources to support its energy-intensive mining operations: “Bhutan’s rivers, fed by the glaciers of the Himalayas, offer significant energy potential, with a total of 23,700 megawatts considered usable. To put this in perspective, 23,700 MW of energy is enough to power 17 million American homes.”
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The differences between both countries
In short, Bhutan uses hydroelectric power for 99.5% of its energy needs, has all the potential to increase its mining operations, having invested $150 million in graphics processing units (GPUs). Together with Druk Holding & Investments, the company that manages Bhutan’s financial assets, it is planning a huge expansion of its operations: including a $500 million investment fund to support sustainable extraction activities.
Unlike El Salvador, the government of Bhutan has no major problem selling part of its cryptocurrency reserves whenever it considers favorable, using the profits to increase public sector salaries and support an economy that, due to the collapse of the sector tourism, is going through a difficult time. Bhutan currently has the fifth largest state reserves of bitcoin in the world, only behind the US, China, the United Kingdom and Ukrainethe latter with assets from donations. Experts do not rule out that in the future, the experiments in El Salvador and Bhutan will convince other nations to follow in their footsteps.
At least we are seeing it in the United States: not only Donald Trump promised to create a strategic reserve based on bitcoin, but the states of Wyoming and Pennsylvania could also do so. The increase in government interest in digital assets is also reflected in a publication by Naturewhich discusses the pros and cons, opportunities and risks of bitcoin adoption and use: “Existing studies on the adoption of bitcoin as legal tender examine the incentives and effects. However, a major challenge is the need for a comprehensive regulatory and legal framework to define their status, ensure compliance with anti-money laundering and anti-terrorist financing laws.”
Article originally published in WIRED Italy. Adapted by Alondra Flores.
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