Bhutanese doing their own crypto currency mining in Bhutan

The idea of cryptocurrency mining in Bhutan is relatively new, with mostly young people taking interest in it. With the fourth industrial revolution made possible by the convergence of technologies, crypto currency is gaining popularity in and around the world, and Bhutan is also taking interest in it.

The recent news that Druk Holding and Investments (DHI), the commercial arm of the Royal Government of Bhutan, was mining Bitcoin may have introduced most Bhutanese to crypto currency but there have been young and tech savvy people who have been doing their own mining over the years, albeit at much smaller scales than DHI, usually restricted to a computer or two.

There are also those who import mining computers to mine their favorite coins.

To mine crypto at an individual level, for example, like Bitcoin or Ethereum, one will need high end computers to be able to mine it and the power cost is high. A tech expert who used to mine crypto said that he wrote his own script and put together computer graphic processors to mine crypto and convert it to Bitcoins, which was very profitable.

He sold 1.2 bitcoins at its peak price amd made more than USD 60,000.

However, he shared that crypto was actually created with the intention to decentralize it and to make transaction easier. He added that big companies started mining factories turning it into a very lucrative business and an investment, something different from its initial idea.

With crypto being treated as a lucrative business, many people are willing to try their hands at mining smaller and lesser-known crypto currencies.

One of the lesser-known crypto quite popular among the young Bhutanese or the public in general is Pi network, a crypto that can be mined using one’s phone.

Talking to a Pi business consultant, he shared that although Pi does not have a value in the market as yet, there is high hope that it might get accepted as crypto, and some people are investing in it.

As people have started to think of crypto as the future, crypto currency has gained popularity as an investment that even Bhutanese people are trying to dabble in.

The private individuals mining the crypto currencies themselves, and those who intend to dabble in investment want cryptocurrency and crypto mining to be legalized for them too.

Talking to an investor, he shared that there is a future in crypto, but there are many challenges.

“If crypto becomes legalized in the future, it will be very effective. Crypto opens up platforms to bring in investments, which can bring in revenue. The Financial Institutions in the country do not recognize crypto at the moment, and crypto is very popular among people. People are waiting for it, but currently, we don’t have a system or a payment gateway that supports it.”

Although the Royal Monetary Authority (RMA) does not recognize or endorse cryptocurrency as a substitute/surrogate to legal tender/currency, there is a regulatory sandbox framework for mining cryptocurrency.

According to the framework, it states that the cryptocurrency regulatory sandbox seeks to realize the following objectives which are to ensure that cryptocurrency mining strictly complies with the country’s relevant laws and by-laws in vogue, to regulate and supervise cryptocurrency mining and trading activities to ensure that they do not pose any risks to the financial system, to ensure that appropriate safeguards are put in place to protect the investors and consumers, and to introduce regulatory reforms to overall support disruptive technologies in an innovative way. 

For a person to mine crypto, there are few conditions for operations laid out in the framework which includes not being able to float Initial Coin Offerings (IOC) to raise capital pilot cryptocurrency mining activities either in Bhutan or in any other country, without a prior written approval from the RMA.

 Maintaining real identities of parties involved, including, customer identification, verification and record keeping, in the buying, holding or trading of cryptocurrency and they should adhere to the requirements of relevant laws, submitting details of those individuals and parties to the RMA of those international clients, including but not limited to, details about the legality of exchange houses, articles of incorporation, safety and soundness measures, e-KYC, consumer protection and legal recourse mechanisms provided by these clients’or exchange houses, and not engaging and or promoting buyingor selling and trading of cryptocurrency inside the country, nor facilitating cryptocurrency services, such as exchanges or intermediaries.

The framework also includes piloting the project with utmost discretion and refraining from engaging in cryptocurrency launching and marketing campaign, and piloting cryptocurrency mining at their own risks and being solely liable about the potential financial, operational, legal, customer protection and security risks.