Bhutan’s Cryptocurrency Ambitions Face Challenges
Nine months into its ambitious initiative to integrate cryptocurrency payments, Bhutan is encountering limited interest from both tourists and local businesses. In May, the Himalayan nation became the first country to launch a nationwide crypto payment network for visitors. Tourists could use over 100 cryptocurrencies via Binance to pay for visas, flights, hotels, and meals. Within the first month of the program’s launch, more than 1,000 merchants signed up to accept crypto payments.
However, nearly a year later, the situation on the ground has not changed much. In Thimphu, QR codes displayed by local businesses to receive crypto payments are largely unused. Many merchants have yet to see any customers choose this option.
Sonam Dorji, who works at Lotus Peak Enterprise, a handicraft store located at the Le Meridien hotel, shared his experience with Rest of World. He mentioned that no customer has used the crypto payment option in the past four to five months. “No one knows that we accept cryptocurrency and Binance Pay,” he said.
Experts and locals suggest that the government’s push for cryptocurrency is influenced by its substantial bitcoin reserves, rather than addressing structural challenges such as power shortages and low literacy levels, which hinder widespread adoption.
Jay Zagorsky, a professor at Boston University’s Questrom School of Business, explained that mining bitcoin provides Bhutan with a currency to purchase imports, which it previously lacked. However, he emphasized that simply pushing digital payments does not make them sensible.
Zagorsky is the author of The Power of Cash: Why Using Paper Money is Good For You and Society. The book argues that preserving physical money is essential for protecting individual privacy, curbing overspending, and preventing economic exclusion of vulnerable populations.
The director of Bhutan’s Department of Tourism, Damcho Rinzin, and DK Bank CEO Ugyen Tenzin did not respond to requests for interviews or comments.
Bhutan began mining bitcoin in 2019. The country benefits from abundant rivers and mountainous terrain, which provide ample hydroelectric power. With a population of less than a million people, domestic electricity consumption is low, allowing surplus energy to be used for crypto mining operations.
In October 2024, Bhutan’s bitcoin reserves reached $1.4 billion, making it the largest state-backed green-mined reserve in the world. Other countries with larger government reserves, like the U.S. and China, acquired bitcoin through purchases or asset seizures — or, in Ukraine’s case, donations.
Despite these achievements, Bhutan’s infrastructure does not support widespread adoption of cryptocurrencies for transactions. One-third of Bhutanese people are not literate, a necessary criterion for navigating digital payments, according to Zagorsky.
The country also faces an unstable power supply, which can complicate digital payments. On average, customers deal with power cuts 19 times a year due to issues under the control of power companies, according to a government report. One-fifth of businesses in Bhutan own or share a ground generator, as per World Bank data.
“Using crypto as legal tender means items like bitcoin need to be accepted by all types of businesses, from large to very small, at all times for any debt,” Zagorsky said. “Countries with shaky infrastructures and low rates of literacy are not the best places for introducing new types of legal tender, especially when other small countries like El Salvador, who have tried it, did not see the experiment succeed.”
In 2021, El Salvador became the first country to make bitcoin legal tender — a decision it reversed in 2025 when the International Monetary Fund had to bail out the struggling economy. The Central African Republic, which made bitcoin legal tender in April 2022, also reversed the decision within a year after significant pressure from the IMF and World Bank. Compared to El Salvador, it saw barely any adoption among its citizens, given low internet penetration and frequent power outages.
At one of Thimphu’s oldest eateries, Ambient Cafe, owner Junnu Chhetri told Rest of World that her establishment doesn’t track the daily usage of Binance. She noted that some guests — mostly foreigners — have used it.
Experts believe Bhutan is not necessarily heading in the same direction as El Salvador and the Central African Republic. The current system instantly converts crypto payments to ngultrum for merchants. It’s more of a gateway than a store of value, reducing risk and volatility.
“Initially, there was talk about expanding crypto payments to other sectors, but in practice, I haven’t seen this happen in any significant way yet,” Ugyen Dendup, co-founder of Bhutan’s first AI startup NoMindBhutan, told Rest of World. “At the market or business level, tourism is the only sector where this conversation is visible, and even there, adoption remains limited.”
Dendup added that there is nothing clearly written or formalized on paper regarding crypto laws or regulations in Bhutan. “It exists in a kind of gray area: Some people push for it, some are cautious, and enforcement or guidance isn’t very clear,” he said. “Because of this, it’s hard to say whether Bhutan is moving toward making bitcoin legal tender.”