Bhutan’s Crypto Paradox: Adoption Advances Amid Connectivity Challenges

In the serene Himalayan nation of Bhutan, where ancient monasteries grace misty mountain landscapes, cryptocurrency is steadily weaving its way into daily life. Cointelegraph recently visited the Kingdom of Bhutan, exploring its capital, Thimphu, and the popular cultural and tourism hub of Paro, to observe the burgeoning grassroots interest in digital assets.

During the Binance Crypto-Powered Tour, firsthand observations at Changyul Park and a local four-star hotel revealed tourists and residents utilizing crypto for payments. This comes just months after crypto exchange Binance introduced crypto payment services in the country. On May 7, Binance Pay officially partnered with Bhutan’s DK Bank, enabling Binance account holders to pay for a wide range of services and goods, including flights, hotels, visas, Sustainable Development Fees, and even street-side snacks, using Bitcoin (BTC), BNB, USDt, and other digital currencies. According to DK Bank president Ugy Gelephuin, nearly 1,000 merchants have already joined the program to accept crypto.

A Nation Embracing Digital Transformation

While crypto payments are gaining traction, a significant portion of Bhutan’s economy still relies on cash, as noted by local tour guide Kuenley Dorjee. He explained that while the Bhutanese public is just beginning to grasp the full implications of cryptocurrency, there is a clear eagerness to embrace digital transformation.

Dorjee lauded the country’s progressive stance on crypto, attributing much of this forward-thinking approach to Bhutan’s monarch, King Jigme Khesar Namgyel Wangchuck, often referred to as the “Dragon King.” Under his reign, Bhutan has embarked on state-backed initiatives such as hydro-powered Bitcoin mining and has reportedly accumulated crypto holdings exceeding 12,000 BTC. Local reports in 2023 indicated that Bhutan had been engaged in Bitcoin mining with hydropower since 2019, when Bitcoin’s price was considerably lower. More recently, on January 8, Bhutan’s Gelephu Special Administrative Region (SAR), also known as Gelephu Mindfulness City (GMC), unveiled plans to establish a strategic crypto reserve.

Internet Instability: A Roadblock to Widespread Adoption

Despite the growing enthusiasm, inconsistent internet connectivity presents a significant hurdle to widespread crypto adoption. During their visit, Cointelegraph experienced fluctuating WiFi speeds in both Paro and Thimpu, a sentiment echoed by other participants on the crypto tour. Online discussions on platforms like Reddit further corroborate these challenges, with one user describing Bhutan’s internet connection as “horrendously slow, tedious and requires all the patience in existence.”

Given that crypto payments necessitate stable internet connections, these connectivity issues could lead to disruptions in transactions involving digital assets.

However, there is a hopeful development on the horizon. Satellite internet provider Starlink launched its services in Bhutan on February 17, as reported by the local Bhutan Broadcasting Service. This initiative has the potential to address the existing connectivity problems, aiming to deliver speeds of 100–200 Mbps to the region. In a recent media roundtable, Ugy Gelephuin acknowledged Starlink’s arrival as a “blessing” for the country, emphasizing the critical role of speed in crypto payments. While acknowledging that the infrastructure isn’t fully developed yet, the DK Bank executive expressed confidence that Bhutan is progressing in the right direction.