Print — cryptocurrency-policy-and-regulation-in-bhutan — BhutanWiki

Cryptocurrency policy and regulation in Bhutan rests on a bifurcated framework. The state, through its sovereign wealth fund Druk Holding and Investments (DHI), has accumulated and traded Bitcoin since around 2019, while the Royal Monetary Authority (RMA) restricts ordinary residents and RMA-supervised banks from on-ramping into digital assets. There is no comprehensive Bhutanese statute defining cryptocurrency, regulating exchanges, or licensing virtual asset service providers (VASPs) outside the special administrative region created at Gelephu Mindfulness City.^[1][2]

The 2019 Cryptocurrency Mining Regulatory Sandbox Framework, the 2018 Anti-Money Laundering and Countering Financing of Terrorism Act, the Royal Monetary Authority Act 2010, and the 2024 Application of Laws Act for Gelephu Mindfulness City together form the patchwork through which digital-asset activity is governed. The RMA notice of 30 April 2025 is the most recent consolidated public statement of policy, narrowing legal mining and exchange activity to entities registered inside Gelephu Mindfulness City.^[1][3]

This article is the regulatory companion to the operational coverage in cryptocurrency and Bitcoin mining in Bhutan. Where that article documents what the state has mined, sold, and disclosed, this one addresses the laws, notifications, and supervisory authorities that purport to govern those activities and the corresponding restrictions on private citizens.

The 2019 RMA framework

In January 2019 the Royal Monetary Authority issued a Cryptocurrency Mining Regulatory Sandbox Framework, the first formal Bhutanese instrument addressing virtual currencies. The framework did not declare cryptocurrency illegal but imposed strict approval, know-your-customer (KYC) and anti-money laundering (AML) conditions on any mining business operating in Bhutan, and placed approval power with the RMA.^[1][2]

Public commentary commonly describes the 2019 instrument as a prohibition on retail crypto activity. The available record supports a narrower characterisation: the framework focused on licensing mining operations rather than retail trading, and the RMA subsequently relied on its general supervisory powers over banks, payment systems, and foreign exchange to bar residents from converting Bhutanese ngultrum into crypto through any RMA-regulated institution. The original sandbox text has not been published in full on the RMA website as of April 2026, and most accessible references rely on summaries.^[2][4]

Statutory framework

Several Bhutanese statutes touch digital-asset activity, although none names cryptocurrency directly.

The Royal Monetary Authority Act 2010 establishes the RMA as Bhutan's central bank and, under section 9(a), as the sole authority entitled to issue legal tender. The Act reserves currency issuance, exchange-rate management, and the supervision of payment systems to the RMA. Cryptocurrency is not legal tender in Bhutan, and any payment system using digital assets falls within the RMA's general payment-systems supervisory mandate.^[5]

The Anti-Money Laundering and Countering Financing of Terrorism Act 2018 defines reporting entities and predicate offences for money laundering. The Act does not contain a stand-alone definition of "virtual asset" or "virtual asset service provider", which is the terminology adopted in 2018-2019 by the Financial Action Task Force (FATF). Bhutan's Financial Intelligence Department, housed inside the RMA, is the country's designated financial intelligence unit and is the channel through which suspicious-transaction reporting on crypto-linked transactions would flow.^[6]

The Penal Code of Bhutan 2004 (see Penal Code of Bhutan) criminalises money laundering, fraud, and a range of predicate offences that can attach to crypto transactions used for illicit purposes. The Code does not define cryptocurrency, and there are no reported convictions specifically for crypto-related offences in published Kuensel or Bhutanese Court of Appeal records as of April 2026.

The Income Tax Act of the Kingdom of Bhutan 2001, as amended, does not define digital assets. Officials of the Department of Revenue and Customs were reported in Bhutanese media around the 2024-2025 income-tax revision to be treating cryptocurrency receipts as part of the broader category of "digital services" for personal-income-tax purposes, although no implementing regulation or schedule has been published. The treatment of unrealised gains held by sovereign entities such as DHI is not addressed in any published guidance.^[2]

The state-mining exemption

Bhutan's sovereign Bitcoin mining operations sit outside the regulatory regime that applies to private actors. DHI is the holding vehicle for the Crown's commercial assets and is constituted by Royal Charter. It is not directly supervised by the RMA in the way that a commercial bank or payment-services firm would be, and its commodity holdings have not been treated as falling within the 2019 mining sandbox framework or the AML/CFT Act's reporting-entity provisions in any publicly disclosed regulatory determination.^[7]

Reporting by Forbes, CoinDesk, Euronews, and Fortune has noted that DHI's mining and trading activity is not covered by routine financial disclosures: the fund has not published a year-end statement of crypto holdings, the locations of state mining sites were identified by satellite imagery rather than by official disclosure, and parliamentary oversight of crypto-related transactions has been limited. Forbes reporting in 2023 identified four state mining sites at Dochula, Trongsa, Dagana, and the abandoned Education City project; the Bhutanese government did not publish their existence beforehand.^[7][8]

Critics, including some opposition figures and academic commentators, have argued that direct DHI investment in a non-equity commodity is in tension with the holding company's charter, which is generally described as authorising investment in companies rather than in commodities. There has been no public ruling by the RMA, the Office of the Attorney General, or the National Assembly addressing that question, and the government has not contested the framing in any published response.^[7]

The Druk Bitdeer joint venture

In May 2023 DHI and Bitdeer Technologies Group, a NASDAQ-listed (BTDR) Bitcoin mining firm, announced a partnership to develop hydropower-backed mining in Bhutan, with a closed-end fund of up to US$500 million in which Bitdeer was general partner and DHI a strategic limited partner. Bitdeer subsequently expanded the data-centre site at Jigmeling in Gelephu on a 90-acre footprint, with a capacity of approximately 600 megawatts targeted by 2025.^[9][10]

The legal pathway authorising Bitdeer to operate in Bhutan has not been publicly itemised. The arrangement has been described in company statements as a strategic partnership rather than a foreign direct investment licensed under the standard Foreign Direct Investment Policy 2019, and no implementing instrument from the Ministry of Industry, Commerce and Employment has been published. Hosting agreements, power-purchase terms, and tax treatment of the joint venture have not been disclosed in Bhutanese government records or in Bitdeer's SEC filings beyond the existence of the closed-end fund and its broad commercial structure.^[9]

Gelephu Mindfulness City and digital assets

The Application of Laws Act 2024, the first statute enacted under the Royal Charter for the Gelephu Mindfulness City Special Administrative Region, received royal assent on 26 December 2024. The Act adopts an enumerated set of Singaporean statutes and Abu Dhabi Global Market financial regulations as the operative legal framework for company law, taxation, and financial services within Gelephu Mindfulness City, replacing equivalent Bhutanese statutes for activities conducted inside the special administrative region.^[3][11]

Reporting by DigiconAsia, BSC News, and Bhutanese outlets indicates that the GMC framework establishes a basis for licensing virtual-asset financial services within the special administrative region, with the Gelephu Financial Services Office acting as the licensing authority. On 8 January 2025 GMC announced that Bitcoin, Ether, and Binance Coin would be recognised as part of the special administrative region's strategic reserves, citing market capitalisation, liquidity, and on-chain monitoring as criteria. The full text of the Application of Laws Act 2024, including the schedule of adopted laws, has not been posted in a complete English version on a Bhutanese government domain as of April 2026.^[3][11]

The first regulated entrants under the new framework include Matrixport, a digital-asset financial-services firm. Matrixport announced in December 2024 that it was applying to the Gelephu Mindfulness City Authority for a Financial Services Permission Licence. It received an in-principle approval in February 2026 to operate regulated financial services involving virtual assets within or from Gelephu, including custody, prime brokerage, and structured products.^[12]

The 17 December 2025 royal pledge of up to 10,000 BTC from sovereign reserves toward Gelephu development is not, by itself, a regulatory instrument; it is a public commitment by the Crown that anticipates, but does not amend, the existing Application of Laws Act framework. See Gelephu Mindfulness City for the Charter context.

AML/CFT compliance and the APG

Bhutan joined the Asia/Pacific Group on Money Laundering (APG) in July 2011. Its first Mutual Evaluation Report was adopted in September 2016, before FATF Recommendation 15 was extended to virtual assets and VASPs in October 2018. The most recent published APG follow-up report on Bhutan, the sixth follow-up dated June 2023, addresses Bhutan's technical compliance progress on the AML/CFT regime more broadly; published summaries do not record an upgraded rating on Recommendation 15, and Bhutan has not published a national risk assessment of virtual assets specifically.^[13]

The mismatch between Bhutan's scale of state mining activity and the absence of a domestic VASP-licensing regime has been noted in international policy commentary, although it has not been the subject of a public APG finding. With the Gelephu Mindfulness City framework now licensing virtual-asset firms, the APG's next mutual evaluation cycle is likely to address whether Bhutanese regulation extends to those entities and whether their supervision is consistent with FATF Recommendation 15.

The retail-citizen prohibition

For Bhutanese residents outside Gelephu Mindfulness City, the regulatory picture is one of restriction rather than codified prohibition. The RMA notice of 30 April 2025 confirms that on-ramping local currency into crypto through Bhutanese banks regulated by the RMA remains restricted. Crypto mining and exchange activity is permitted only inside Gelephu Mindfulness City, by entities registered under that special administrative region's framework.^[1]

The notice does not, by its own terms, criminalise the possession of cryptocurrency by individuals, peer-to-peer transactions, or trading on offshore exchanges, and the Penal Code does not list any of those activities as offences in themselves. In practical terms, however, the RMA's control of foreign-exchange convertibility makes legal funding of an offshore exchange account from a Bhutanese bank account difficult, and the absence of merchant-acquiring infrastructure for crypto payments outside the Binance Pay tourism arrangement (see below) means there is no domestic legal payment rail for residents.^[1][14]

In May 2025 the RMA, Druk Kidu Bank (DK Bank), and Binance Pay launched a tourism payment system limited to international visitors, allowing them to pay registered Bhutanese merchants in cryptocurrency that is converted instantly into ngultrum or US dollars at the merchant end. The arrangement is a foreign-exchange channel for inbound tourism revenue and does not extend the right to use cryptocurrency to Bhutanese residents themselves.^[14][15]

International commentary

Forbes, CoinDesk, Fortune, Al Jazeera, and Rest of World have all reported on the gap between state-led crypto activity and the regulatory posture toward citizens. Al Jazeera's April 2025 coverage and Fortune's May 2025 profile of DHI quote the fund's chief executive Ujwal Deep Dahal on the strategic justification for sovereign Bitcoin mining without addressing the citizen-side restrictions. CoinDesk's April 2026 reporting noted that DHI had reduced its Bitcoin holdings to roughly 3,954 BTC after a series of sales beginning in late 2024 and observed that no public oversight mechanism has produced a contemporaneous account of the disposals. Rest of World's 2026 reporting on the Binance Pay tourism rollout noted that very few transactions have actually been completed in the year following launch, partly because tourists are unaware the option exists.^{[7][8][14][15]}

Future direction

Three signals indicate the direction Bhutanese policy may take, although none constitutes a binding statute or regulation outside Gelephu Mindfulness City:

The continuing build-out of the Gelephu Mindfulness City Authority as a licensing body for virtual-asset financial services, with Matrixport's in-principle approval as the leading test case.^[12]
The RMA's exploratory work with Ripple Labs on a central bank digital currency pilot for a digital ngultrum, which would, if launched, provide a sovereign digital-payment instrument distinct from cryptocurrency.^[1][2]
The 17 December 2025 royal pledge of up to 10,000 BTC toward Gelephu Mindfulness City, which links sovereign Bitcoin reserves to a budgeted programme and may, in time, prompt parliamentary or constitutional oversight of how those reserves are managed.^[3]

The Bhutanese parliament has not, as of April 2026, considered a comprehensive digital-asset bill. There is no public draft of a Virtual Asset Service Provider Act, and neither the Ministry of Finance nor the RMA has issued a position paper proposing a national framework outside the Gelephu Mindfulness City special administrative region.

Sourcing notes

Primary regulatory text for Bhutanese cryptocurrency policy is sparse in the public record. The 2019 Cryptocurrency Mining Regulatory Sandbox Framework has not been posted in full on rma.org.bt; the 30 April 2025 RMA notice exists as a short news item; and the Application of Laws Act 2024 schedule of adopted Singaporean and ADGM laws has not been published in a complete English version on a Bhutanese government domain accessible from outside the country. Many of the regulatory statements summarised here therefore rely on press accounts and on derivative analyses by commercial and academic commentators. Where primary government sources become available the article should be revised against them.

Cryptocurrency policy and regulation in Bhutan