Bhutan is exploring the use of hydropower to mine green cryptocurrencies. The aim is to support the economy and reduce youth migration, according to the head of the country's sovereign wealth fund.

Green cryptocurrencies are digital currencies mined using renewable energy, such as hydropower. Unlike fossil fuels, these energy sources have a lower environmental impact.

Bhutan is located between India and China. It has invested in popular cryptocurrencies in recent years. Two government officials in Thimphu said profits from these investments helped pay public sector wages for two years.

Bhutan Leverages Hydropower for Green Crypto Mining

The sovereign wealth fund, which also oversees Bhutan’s sole power utility, began investing in cryptocurrencies in 2019. CEO Ujjwal Deep Dahal, Druk Holding and Investments Ltd, CEO said the fund viewed these assets as both a strategic investment and a potential turning point for the country.

Bhutan operates large computers using hydropower to mine digital coins. Officials are assessing whether international corporations would be willing to buy these "green" coins to meet environmental, social, and governance (ESG) targets.

While Bhutan is scaling up green crypto mining through hydropower, Russia has imposed a six-year ban on crypto mining in 10 regions starting January 2025. This move, aimed at reducing fossil fuel consumption, seeks to conserve energy for essential sectors, especially during peak winter demand when power shortages are more likely.

Check out a story on ESG trends and their impact on the CFD industry at FinanceMagnates.com: Profit and Planet: Forex Brokers Embrace Sustainability amid $50 Trillion ESG Surge.

Youth Exodus Impacts Bhutan's Crypto Ambitions

“Bitcoin has not just given more value to hydropower energy, it has also increased access to liquidity in foreign currency,” said Dahal. He added that training young people in blockchain and AI could create jobs.

The country, with a population of about 800,000, is experiencing a youth exodus. Government data shows over 10% of young people left the country between 2022 and 2023. Youth unemployment rose to 16.5% in 2024.

Analysts say Bhutan’s plan to become a centre for green cryptocurrency mining will depend on expanding its hydropower. The country currently has about 3.5 gigawatts in capacity, but it has the potential to reach 33 gigawatts.