Bhutan, a Himalayan Kingdom, otherwise known for its picturesque villages and “happiness index” of its people, now has a staggering $1 Billion in Bitcoin holdings, as per latest data. Bhutan government’s extensive investment into Bitcoin mining has paid off as the nation keeps marching forward in crypto holdings and revenue.
Apart from Bhutan, other developing nations in Latin America and Africa such as El Salvador, Kenya and Paraguay, have also made strides towards crypto adoption. These countries have implemented eco-friendly mining operations, promoting the use of green energy. Compared to Bhutan, its neighbour India has had a rather conservative approach towards cryptocurrencies that keeps oscillating between a blanket ban or complete disdain and high taxes.
As the price of Bitcoin has reached unprecedented heights amid an ongoing bull run, the success of Bhutan is a wake-up call for the Indian government to bring clearer guidelines on crypto regulations and get involved in Bitcoin mining.
Bhutan Leads In Crypto Adoption
The Himalayan Kingdom of Bhutan is setting the bar high by mining millions worth of Bitcoins. It generates a range of 55 BTC to 75 BTC per week from its mining operations. In September 2024 analytics platform Arkham Intelligence revealed that Bhutan has 13,011 BTC in their stack worth over $780.49 Million. Their government uses AntPool, Braiins, and Foundry mining pools to mine Bitcoins.
Furthermore, in May 2023 Druk Holding & Investments (DHI), the commercial arm of Bhutan, partnered with Bitdeer for sustainable mining. They also raised a fund of $500 million under this partnership. According to the 2023 report of World Bank data, Bhutan’s crypto reserve is equal to 26.9% of its total GDP of $2.9 Billion. The efforts and developments done by the Royal Government of Bhutan clearly show how a developing nation can leverage technology for economic growth.
Source: Dune
The Dune analytics data shows, that in October 2022, Bhutan’s BTC holding was close to 75 BTC. It then witnessed an exponential surge and took its holding to 13,136 BTC, a 177-fold growth. Additionally, all mining operations utilize hydroelectric energy resources to mine BTC.
El Salvador: First Movers In Crypto Adoption
El Salvador was the first country to make Bitcoin their legal tender in 2021. Their President Nayib Bukele openly supports crypto space and developing the first-ever “Bitcoin City”.
Source: Dune
At the time of writing, the country holds over 5,889 Bitcoins which have a worth of $387.2 million. Additionally, El Salvador also utilizes geothermal energy from volcanic activity to mine Bitcoins. El Salvador is hosting solar power plants and hydropower projects to boost their Bitcoin mining infrastructure. Besides this, they also conduct technical Bitcoin education programs for a wider adoption of Bitcoin. All these efforts by El Salvador serve as an example of how to adopt innovation and create opportunities from it.
Kenya: Africa’s Rising Crypto Star
Kenya is rapidly emerging as a crypto hub in Africa. This African nation has collaborated with the mining giant Marathon Digital to elevate its crypto-mining operations. This collaboration could transform Kenya’s economy and set a precedent for other African nations.
Paraguay: A Potential Contender In Crypto Mining
Paraguay has abundant energy resources that could be harnessed for crypto mining. Paraguay has been exploring regulations to facilitate Bitcoin mining. Moreover, it is rich in hydroelectric power which could help the nation to be a hub for Bitcoin mining but the political challenges have limited its potential.
Paraguay generates more than 90% energy from its hydroelectric dams. They even export the surplus energy to Argentina and Brazil at very cheap prices. It is among the top 10 power exporters worldwide.
Why Do Larger Countries Lag?
While smaller countries like Bhutan and Kenya are adopting crypto for their potential economic growth, larger nations still hesitate to fully embrace crypto.
Regulatory Concerns and Challenges
Larger nations, especially those with diverse economies, tend to have stricter financial regulations. Their governments constantly show their concerns regarding the potential use of crypto in money laundering, tax evasion, and other illicit activities, which is slowing down widespread adoption.
Economic and Financial Stability Considerations
Bigger economies with well-established financial systems are often wary of introducing disruptive technologies like crypto. They worry that these could disrupt their current money policies, financial stability, or the value of their currency.
Existing Financial Infrastructure
Smaller nations lack proper financial infrastructure on the other hand large economies have established financial systems. Switching to a new decentralized model could be challenging and regulators also worry that it could impact the old systems in place. Additionally, banks and financial institutes might also resist this change as they already invested heavily in the current system.
India’s Potential To Become Crypto Leader
India has the opportunity to become not just a participant but a leader in the global crypto economy. Recently, India topped the 2024 Global Adoption Index list published by Chainanalysis, showing its potential to lead the crypto space on a global level.
India has a large pool of young, tech-savvy individuals coupled with a growing start-up culture that provides a fertile ground for blockchain and crypto innovations. If India clears its Regulatory uncertainty hurdle, It has the potential to emerge as a global leader in the cryptocurrency space.
Uncertainty Hurdles In India
Despite having a large user base, India’s ecosystem still faces regulatory uncertainty. In 2028, the government of India imposed a banking ban on crypto businesses. The ban affected many firms like WazirX and Coin DCX. The ban was lifted in 2020, but the damage has already been done.
Furthermore, in 2023 the government issued show cause notices for 9 offshore crypto exchanges such as Binance, Bittrex, Bitstamp, Kraken, Bitfinex, MEXC Global, Huobi, Gate.io, and KuCoin for not complying with local regulations. In 2024, big exchanges like Binance and Kucoin were fined for regulatory violations.
Recently, India witnessed its biggest crypto hack, where hackers stole approximately $234 Million worth of crypto assets from the exchange. Despite this, the government has not yet introduced a comprehensive regulatory framework, leaving the industry in a state of uncertainty.
Proposed Roadmap for India’s Crypto Adoption
India can learn from smaller nations and adopt a measured approach to crypto regulation, which could help balance innovation with financial stability. Here’s a proposed roadmap:
India should adopt a phased regulatory framework, and implement pilot programs and sandboxes for controlled crypto experimentation. Additionally, they should foster public-private partnerships to drive innovation and promote education and awareness initiatives to enhance crypto literacy and balance financial stability.
Final Thoughts
The success stories from smaller nations like Bhutan give a valuable lesson for larger economies like India. By adopting a balanced approach to crypto India can generate some new sources of revenue and generate employment opportunities. The path might be complex, but as Bhutan has shown, the rewards can be transformative. In this new world of digital finance, it’s not the size of the economy that matters, but the size of the vision. It’s time for India to dream big in the world of crypto.
Also Read: Crypto Investor Shares Rare Glimpse of Bitcoin Mining in Bhutan
