Bhutan to Finance 'Mindfulness City' with Up to 10,000 Bitcoin

Bhutan Banks on Bitcoin for Economic Development

The Kingdom of Bhutan plans to use up to 10,000 Bitcoin from its state reserves to finance the development of the new special administrative region Gelephu Mindfulness City (GMC) ^[1][2]. The city is being built in Gelephu in southern Bhutan and was launched in 2024 as the country's new economic center ^[1][2].

The project aims to stem the exodus of young Bhutanese citizens by creating high-quality jobs domestically ^[1][2]. The city is designed to attract companies from various sectors, including finance, tourism, green energy, technology, healthcare, and agriculture ^[2].

One of the Country's Largest Development Projects

The project area encompasses approximately 10 percent of Bhutan's land area, equivalent to about 1,544 square miles ^[1][2]. This makes it one of the country's largest planned development zones ^[1]. The special zone offers regulatory flexibility for crypto and fintech companies and simultaneously serves as a location for further expansion of Bhutan's state-run Bitcoin mining operations ^[1][2].

Strategies for $875 Million Bitcoin Reserves

The government is evaluating various strategies for its BTC reserves worth approximately $875 million ^[1][2]. These include conservative yield models, long-term holding, and structured reserve management ^[1][2]. According to the government, the long-term preservation of the Bitcoin holdings is the priority, while urban development is to proceed gradually, stably, and sustainably ^[1][2].

"Bitcoin's enduring strength lies in its ability to compound value over time," the country stated in its announcement ^[2]. Any use of Bitcoin will be guided by strong governance and prudence, with emphasis on capital preservation, appropriate oversight, and transparency ^[2].

Bhutan Among the Five Largest Bitcoin-Holding Nations

Bhutan is considered one of the five largest Bitcoin-holding nations in the world ^[1]. According to estimates by Bitbo, the kingdom holds approximately 11,286 Bitcoin worth over $986 million ^[2]. The country's Bitcoin holdings originate primarily from state-run mining operations ^[1][2].

The project is part of the national Bitcoin Development Pledge, through which Bhutan aims to strategically utilize Bitcoin for long-term economic development and state revenues ^[1][2].

Vision for All Citizens

King Jigme Khesar Namgyel Wangchuck stated that the new city should benefit all of the country's approximately 796,682 residents and must avoid social inequalities ^[1][2]. "Think of GMC as a company and landowners as its shareholders. Since most land is state-owned, Bhutanese from all Dzongkhags will share in its success," the King said ^[2].

Gelephu Mindfulness City is planned as an economic corridor between South Asia and Southeast Asia and will receive extensive legal autonomy ^[1][2]. The city is to be developed in multiple phases over the next 20 years ^[1][2].

A master plan and legal framework for GMC have already been presented, as well as the appointment of an administrative board and a governor ^[2]. Construction work to prepare the site has also already begun ^[2].

Crypto Infrastructure Already Established

The special administrative region features crypto-based payment options at merchants and tourism service providers ^[2]. Additionally, TER has been introduced, a government-backed digital token pegged to physical gold ^[2]. Bhutan is also experimenting with Ethereum for digital identity solutions ^[1]. Cryptocurrency payments are accepted nationwide, which is also intended to attract tourists ^[1].