In a land best known for gauging progress through “Gross National Happiness”, it may seem ironic that Bhutan’s most productive export is not spiritual wisdom but Bitcoin mining. The kingdom has mined more than $1.2bn worth of Bitcoin since 2019. It does so not with oil rigs or silicon valleys, but with rivers.
The country—with fewer than 800,000 people—is now among the world’s top sovereign holders of the cryptocurrency, edging into a club usually reserved for eccentric tech billionaires and authoritarian regimes.
While the world argues over the energy guzzling sins of cryptocurrency, Bhutan has turned its surplus hydroelectricity into a sovereign wealth engine. During the monsoon, its rivers rage and its reservoirs swell—producing more power than its tiny population can consume. Rather than letting it spill unused, the country channels the excess into high-performance computers that validate blockchain transactions. The reward is coins (and transaction fees) that can be traded globally, stored securely and, unlike the Indian rupee Bhutan otherwise depends on, denominated in dollars.
Nepal, geographically and geologically akin to Bhutan, has neither the coins nor the confidence. Its hydro potential is bigger—some 43,000 megawatts of technical capacity compared with Bhutan’s 30,000 megawatts—but its imagination is smaller. At peak demand the country needs less than 2,400 megawatts, yet generates some 3,500 megawatts. In the wet season power plants spin at full throttle, but a dearth of domestic demand, limited exports (on top of fickle Indian tariffs) leave the country with stranded energy. Rivers run; the economy stands still.
The contrast is instructive. Whereas Bhutan is converting water into wealth, Nepal continues to treat its hydropower like a poorly run cooperative: high on potential, low on productivity. Some of this is technical. The nation lacks the transmission capacity to move power from its monsoon-bloated mountains to industrial zones.
But much of it is political. The country’s bureaucracy views innovation with suspicion. Cryptocurrency is banned outright. Web3 is a buzzword that might as well be a threat. Public agencies—from the Nepal Electricity Authority to the Ministry of Finance—operate in silos, rarely coordinating on strategic opportunities. Energy policy remains transactional not transformative.
Bitcoin mining, critics argue, is speculative, volatile and environmentally suspect. That is often true—especially when powered by coal, as it is in Kazakhstan or parts of China. But in Bhutan’s case, it is a monetisation strategy for clean, excess energy that would otherwise be wasted. The partnership with Bitdeer, a crypto-mining firm led by Jihan Wu, co-founder of Bitmain, is building a 600 megawatts facility—more than Bhutan’s entire domestic energy demand during some months. Far from draining the grid, it acts as a buffer, absorbing surpluses that cannot be exported and cannot be stored.
Nepal has options, were it to act. A back-of-the-envelope calculation suggests that dedicating mere 100 megawatts to mining could generate $200–300m a year, assuming a Bitcoin price of $60,000 and current network conditions. That is nearly a fifth of the remittances the country receives a year from Qatar alone—and without exporting a single worker.
Such returns are, admittedly, volatile. Crypto prices swing. Network difficulty adjusts. Mining profitability is a moving target. But even if the returns are uncertain, the opportunity cost of inaction is certain. Every monsoon season that passes without a plan is another year of wasted energy and wasted opportunity. A regulated, state-led initiative—perhaps a joint venture between the NEA, the Ministry of Finance and a reformed investment authority—could establish mining operations limited to surplus periods and powered exclusively by green electrons. Public-private partnerships with vetted crypto firms could enforce strict compliance: no trading, no tokens, just mining.
More important than hardware is software—of the institutional kind. Bhutan’s leap into Bitcoin was not born of laissez-faire enthusiasm but of strategic coordination. It required belief that a small state could harness a global technology for sovereign gain. Our policymakers, by contrast, view emerging tech with a mixture of disdain and dread. The Nepal Rastra Bank’s blanket ban on crypto precludes not only scams, but also smart pilots. The fear of scandal outweighs the hunger for experimentation.
This is short-sighted. Even countries wary of crypto’s casino economics have begun carving out regulatory sandboxes. The United Kingdom, Singapore and, increasingly, India are building frameworks to experiment with decentralised finance under tight controls. Nepal could do the same—starting small, learning fast. It could train engineers, certify data centres and develop energy markets that treat electricity not just as a utility, but as a strategic export.
In the Himalayas, rivers are not in short supply. But ambition is. Bhutan has shown what is possible when a nation stops asking whether a new idea is too risky and starts asking whether the cost of delay is greater still. Nepal has more people, more water, more land—and arguably more to gain. What it lacks is the will to plug into the 21st century.
Nepal could learn from this. But odds are it won’t.
