780 Million US Dollars in Mining Revenue in Bhutan
In Bhutan, an economic and financial strategy is being implemented with a strong focus on cryptocurrencies. Let us see the details.
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Bhutan is a small kingdom nestled in the Eastern Himalayas. It is famous for being one of the countries with the highest rate of happiness in the world and, perhaps, will now also become famous for the revenue generated in its territory by the cryptocurrency industry and, in particular, by mining.
According to an analysis by the reputable onchain monitoring site Arkham Intelligence, the Bhutan monarchy's first Bitcoin address, Druk Holding and Investments, holds $780 million in crypto, including Ether, BNB, Polygon and BTC. This means that Bhutan's cryptocurrency reserves account for more than 26.9 per cent of the $2.9 billion national GDP recorded in 2023 by the World Bank.
Debt and Cryptocurrencies, the Bhutan Example
Bhutan is offering a virtuous example of how mining can be used to achieve economic improvement. Countries with high debt levels suffer all the economic strains of rising borrowing costs and increasing fiscal challenges faced by the entire planet. It is very difficult for poorer governments to sustain the current economic model. The risk of the gap between rich and poor widening is very real.
Bhutan's strategy follows the one proposed in Nashville, during the world conference on the future of Bitcoin, by Michael Saylor, the president and founder of MicroStrategy, a software house and producer of BTC-proxy. According to his vision, all countries with significant debts could rely on Bitcoin to manage their economic problems.
Asset Change: from Physical to Digital Reserves
Saylor's plan envisages a strategy in which the national bank reallocates its reserves of value from traditional assets, such as gold and bonds, to cryptocurrencies with greater growth potential, such as Bitcoins, which are currently the most promising infrastructure. In the long term, in fact, a reserve in BTC could gradually become more and more valuable, leading the country to own considerably more than it has in its vaults today.
Bhutan is, in fact, the typical subject. It is a small country with a low population density and economic conditions that are not terrible, though not prosperous either. The World Bank classifies the Himalayan monarchy as a developing nation. In fact, leading indicators point to a per capita gross national income (or GNI) of no more than $14,005 in these latitudes.
Let us bear in mind that most of the world's states are in this condition. Many countries could therefore take Bhutan as an example and imitate its strategy. Some have already declared their intention to do so. In South America, governments such as Argentina, Paraguay, Venezuela and, of course, El Salvador (in El Salvador Bitcoin is already the second national currency) are already moving in this direction. Kenya, too, seems to want to bet big on crypto.
A Strategy in Step with the Times
Of course, investing in crypto means taking risks, as these systems are extremely volatile. On the other hand, however, if you want to catch up and improve a critical economic situation, an asset like cryptocurrencies can change the situation and bear fruit as part of a medium- to long-term strategy. Indeed, the growth potential is unparalleled these days.
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