Calay News
Bhutan has unveiled plans to develop the cryptocurrency sector in its territory. In collaboration with Singapore-based Bitdeer Technologies Group, the kingdom’s investment arm, Druk Holding & Investments (DHI), is looking to build a cryptocurrency plant based on hydropower. Construction of the 100-megawatt plant is expected to be completed between July and September this year. For the project, DHI and Bitdeer plan to find investors to provide up to $500 million.
Bhutan will focus on Bitcoin mining and hopes to look at low-volume, high-value assets to build its economy. Although discussions about Bitcoin mining in Bhutan have taken place since 2020, the country’s authorities have not revealed their intentions until now. According to sources cited by Forbes, DHI started mining Bitcoin several years ago, when its price was around $5,000.
Bhutan has significant hydropower capacity and produces a similar amount of electricity per capita to the US, a much richer country. Cheap hydropower is attractive to miners, whose job it is to convert undervalued electricity into Bitcoin. In addition, measures taken by some countries aimed at restricting or banning cryptocurrency mining also favor Bhutan. The COVID-19 pandemic, which undermined the tourism sector, a crucial industry for Bhutan, also contributed to the development of cryptocurrency.
However, the bankruptcy of the FTX crypto exchange, along with logistical problems with transportation and the operation of mining platforms in the kingdom, dampened interest from crypto-investors. Analysts also doubt that the kingdom is capable of conducting large-scale cryptocurrency operations. Dutch economist Alex de Vries stressed that if operations are shut down for long periods of time, there is a risk of not being able to recover investments.
