We're now 3 years in to Bhutan's Bitcoin experiment
That means we now have robust data on how it has impacted the economy
For context: Bhutan's economy was in dire shape in 2022 due to loss of all tourism income (it's #2 export earner) during the COVID period.
It got so bad that Bhutan was 3 months away from defaulting on import payments.
IMF was poised to step in to structure a loan which would have led to heavy debt repayments, but also ceding of economic sovereignty to a lender whose loan conditions permit them to dictate how to (re)structure an economy.
Instead, Bhutan formed a large Bitcoin Strategic Reserve by using their surplus renewable hydropower to mine Bitcoin.
The IMF has warned on numerous occasions that nations embracing Bitcoin would destabilize their economy, be less effective at attracting foreign direct investment, and endanger their decarbonizing and environmental initiatives.
What does the data say (as reported by Wall St Journal, Al Jazeera and Forbes)
1. Bhutan was able to "use Bitcoin reserves to avert a crisis as foreign currency reserves dwindled to $689 million"
2. The bitcoin reserves have directly addressed pressing fiscal needs. "In June 2023, Bhutan allocated $72 million from its holdings to finance a 50% salary increase for civil servants"
3. Prime Minister Tshering Tobgay in an interview said that bitcoin also "supports free healthcare and environmental projects"
4. Tobgay also said their Bitcoin reserves helped in "stabilizing [the nation’s] $3.5 billion economy"
5. Independent analysts have now said that "this model could attract foreign investment, particularly for nations with untapped renewable resources"
Considering that what transpired in Bhutan has helped stabilize an economy that the IMF warned Bitcoin would destabilize, it begs the question: what data was the IMF's predictions based on?
For Bhutan, Bitcoin didn't just boost the economy, it allowed Bhutan to maintain economic independence and provided an example to other small nations of a path forward that did not require the IMF.
That means we now have robust data on how it has impacted the economy
For context: Bhutan's economy was in dire shape in 2022 due to loss of all tourism income (it's #2 export earner) during the COVID period.
It got so bad that Bhutan was 3 months away from defaulting on import payments.
IMF was poised to step in to structure a loan which would have led to heavy debt repayments, but also ceding of economic sovereignty to a lender whose loan conditions permit them to dictate how to (re)structure an economy.
Instead, Bhutan formed a large Bitcoin Strategic Reserve by using their surplus renewable hydropower to mine Bitcoin.
The IMF has warned on numerous occasions that nations embracing Bitcoin would destabilize their economy, be less effective at attracting foreign direct investment, and endanger their decarbonizing and environmental initiatives.
What does the data say (as reported by Wall St Journal, Al Jazeera and Forbes)
1. Bhutan was able to "use Bitcoin reserves to avert a crisis as foreign currency reserves dwindled to $689 million"
2. The bitcoin reserves have directly addressed pressing fiscal needs. "In June 2023, Bhutan allocated $72 million from its holdings to finance a 50% salary increase for civil servants"
3. Prime Minister Tshering Tobgay in an interview said that bitcoin also "supports free healthcare and environmental projects"
4. Tobgay also said their Bitcoin reserves helped in "stabilizing [the nation’s] $3.5 billion economy"
5. Independent analysts have now said that "this model could attract foreign investment, particularly for nations with untapped renewable resources"
Considering that what transpired in Bhutan has helped stabilize an economy that the IMF warned Bitcoin would destabilize, it begs the question: what data was the IMF's predictions based on?
For Bhutan, Bitcoin didn't just boost the economy, it allowed Bhutan to maintain economic independence and provided an example to other small nations of a path forward that did not require the IMF.
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