Bhutan’s Bitcoin mining expertise might inspire other poor countries to grow their economies.
Bhutan is a strong example of how underdeveloped countries may use Bitcoin mining to strengthen their economies.
On September 16, Arkham Intelligence claimed to have found Bhutan’s investment arm Druk Holding and Investments’ first Bitcoin address. Arkham reports 13,029 BTC, 656 Ether, and $780 million in crypto holdings for DHI.
World Bank statistics shows that Bhutan’s crypto reserves make up 26.9% of its $2.9 billion 2023 GDP. As borrowing prices increase and fiscal pressures deepen, nations worldwide are struggling with high debt. The debt crisis is raising questions about the long-term viability of present economic models, particularly in poorer nations that depend on foreign loans.
At the Bitcoin 2024 conference in Nashville, Tennessee, MicroStrategy founder and chairman Michael Saylor highlighted how countries, particularly those with high debt, may utilize Bitcoin to address their economic difficulties.
He suggested indebted nations switch their government reserves from gold and bonds to Bitcoin, a long-term digital asset. These nations might use Bitcoin’s growth potential to pay off debt and flourish.
The World Bank considers Bhutan, a tiny Asian republic with little economic capability, a developing nation. This category includes countries with GNI per capita < $14,005. This applies to most nations, and many may follow Bhutan’s lead to reduce their debt. Paraguay, Venezuela, El Salvador, Argentina, and Kenya are suspects.
Paraguay wants to regulate Bitcoin mining in 2024 owing to its tremendous hydroelectric electricity. The country’s cheap power prices and favorable environment attract crypto miners.
Bitcoin Paraguay co-founder Criptoboi told Cointelegraph, “Paraguay has a unique position in the globe since 99% of its electricity is hydroelectric.”
Morinigo added that Brazil and Argentina buy Paraguay’s excess hydroelectric dam electricity at “rock-bottom prices” since Paraguay’s energy demand is low.
Politics and legislation hinder Paraguay from mining cryptocurrencies using its excess electricity, despite being South America’s biggest power exporter and one of the top 10 globally.
Paraguay has had the same political party for nearly 70 years, Morinigo said. He thinks Paraguay’s government authorities underestimate its energy capacity to establish a lucrative Bitcoin mining infrastructure.
Paraguay’s legislature passed a cryptocurrency mining regulation law in 2022 to legalize the business. The measure mandated miners to register with the government and follow energy usage rules, promoting crypto-related enterprises in the nation.
However, former President Mario Abdo Benítez rejected the law due to energy usage and little economic advantages. Some MPs suggested the government sell extra energy to local crypto miners instead of exporting it to Argentina and Brazil. Mining enterprises have grown in a regulatory grey zone despite politicians’ opposition.
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