On Dec. 17, according to Cointelegraph, the small South Asian country known for making “Gross National Happiness” a national priority plans to draw 10,000 bitcoins from its sovereign Bitcoin reserve to build a special administrative region called Gelephu Mindfulness City (GMC).

At current market prices, that stash is worth nearly $1 billion. For Bhutan, whose GDP is just over $3 billion, it is roughly the equivalent of putting one-third of the country’s wealth behind a new city.

Bhutan’s move takes the crypto playbook to a new level.

This is not a small country acting on a whim. Bhutan has been laying the groundwork for this for years.

Bhutan’s Bitcoin-Funded Special Zone

Where does Bhutan’s confidence come from? It now holds about 11,286 bitcoins, ranking fifth among sovereign states worldwide, and most of those reserves were mined domestically. Bhutan has abundant hydropower resources and caught the Bitcoin crypto mining boom in earlier years. State-owned Druk Holding & Investments built a 420 MW mining farm and has partnered with Singapore-based Bitdeer to build another 600 MW mining farm.

In 2023, it sold $100 million worth of bitcoin to fund two years of pay raises for civil servants. Prime Minister Tshering Tobgay was blunt at the time: “Selling electricity alone could never raise that amount of money.”

For the 10,000 bitcoins now in question, officials say the plan is to use mechanisms such as collateralization and long-term holding for appreciation. The core concern is avoiding the losses that could come from selling too early, given Bitcoin’s volatility. But however it is structured, putting a country’s core reserves into infrastructure is still a strikingly bold move.

The much-anticipated “Mindfulness City” covers 1,544 square miles, roughly one-tenth of Bhutan’s territory, and was already launched in 2024.

In simple terms, Bhutan wants to turn it into a crypto-friendly economic zone. Finance, tourism and green energy are all meant to be brought in, with especially flexible regulation for cryptocurrency and fintech companies.

It has even placed Bitcoin, Ethereum and BNB into the region’s strategic reserves, making clear that it wants to use the crypto industry to attract investment.

A Calculated Choice

But can this really work? A look at neighboring El Salvador shows how hard cryptocurrency is to manage.

In 2021, El Salvador made Bitcoin legal tender, creating global headlines. The result? By early 2025, it had compromised, removing Bitcoin’s mandatory legal tender status and turning to gold purchases to hedge risk.

Bitcoin was too volatile for the country’s finances to withstand, and it could not secure IMF lending.

Although El Salvador still holds more than 6,000 bitcoins, Bitcoin is now just a voluntary payment option. It has not worked as a proper currency, and ordinary people have largely returned to using the U.S. dollar.

Bhutan has clearly learned from that experience. It has not dared to make Bitcoin legal tender, and it has kept regulatory safeguards in place. The Royal Monetary Authority had already set rules.

In 2019, it introduced a regulatory sandbox for crypto mining, requiring compliance with anti-money-laundering rules, know-your-customer checks and related standards.

In 2025, it went further, making clear that crypto mining and trading could take place only inside GMC.

Bhutan’s Bitcoin reserves are equal to 40% of GDP, making it one of the countries with the largest exposure to crypto assets in the world. It understands better than most that if Bitcoin prices collapse, the entire national economy could be hit.

That is why this approach, using collateral rather than outright sales, is also a way to preserve room to retreat.

A Risky Breakout

At its core, Bhutan’s move is a small country’s risky attempt to break out of the global economic order.

In the past, it relied on hydropower exports, with hydropower revenue accounting for 40% of the government budget. Its bet on cryptocurrency now is both a way to exploit its hydropower advantage and an attempt to reduce dependence on traditional resource exports.

For a small country like Bhutan, conventional development paths have long been constrained by major powers and existing economic rules. Emerging assets such as cryptocurrency have become one of the few openings it can realistically seize.

But risk and opportunity are always tied together. The countries with the largest Bitcoin reserves, including the United States, China and the United Kingdom, mostly acquired them through law-enforcement seizures or accidental accumulation. Bhutan is unusual, and perhaps unique, in actively accumulating Bitcoin through state-run crypto mining and then being willing to deploy it at scale.

More importantly, the rules of the cryptocurrency sector have never been set by small countries.

The attitudes of international financial institutions toward crypto assets, shifts in global regulation, and the movement of major capital can all easily affect Bitcoin’s price, and in turn shape the outcome of Bhutan’s broader gamble.

Bhutan wants to use GMC to transform its economy while also balancing a form of national dividend. The king has proposed treating “GMC as a company and landowners as shareholders,” so that all 796,000 citizens benefit. That balance will be extremely hard to manage.

Bhutan’s experiment is a wager of the country’s future on the global digital-asset market.

It is not the first small country to take this kind of risk, and it will not be the last. As global growth slows and traditional development paths narrow, more small countries may turn their attention to emerging assets such as cryptocurrency. But the rules of this game ultimately remain in the hands of market volatility and international capital.

Whether Bhutan’s “Mindfulness City” can be built may not be the most important question.

What matters is that it has opened a crack: while major powers are still debating the regulatory boundaries of cryptocurrency, small countries are already using real money, or rather Bitcoin, to explore new ways to survive. The question is whether this adventure under the banner of “mindfulness” will help Bhutan find a way through, or pull it into an even larger vortex of uncertainty.

In finance, after all, high returns always come with matching high risks. There are no exceptions.