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Bhutan looks to cryptocurrencies for rapid growth

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Bhutan, a tiny Himalayan country looking to new-age industries for rapid growth and profits, is investing in everything from bitcoin mining to drone technology. After teaming up with Singaporean company Bitdeer, one of the largest bitcoin miners in the world, Druk Holding & Investments, the state-owned commercial holding company, will this month begin pitching to investors to raise as much as $500mn for a crypto mining operation.

Bhutan is betting on cryptocurrencies, following El Salvador and the Central African Republic in doing so. This is despite the sell-offs, contagion, and scandals that have rocked the industry. The secluded nation of 800,000 is renowned for its gross national happiness statistic, which attempts to prioritize wellbeing over economic progress, and only permitted television and the internet in 1999.

Bhutan collaborates with Bitdeer of Singapore as it looks to raise money to mine cryptocurrency

The chief executive of DHI, Ujjwal Deep Dahal, predicted that the tech drive will hasten innovation in the primarily rural economy. Additionally, DHI introduced a biometric digital identity system in February and is currently working on a project to use drones in the electricity industry. According to him, DHI is “focusing on the new generation of industries”. These technologies would

“provide platforms to solve problems and also provide platforms to create industry and to create a diversified portfolio of investments for us”

The primary telecom, power, and aviation industries in Bhutan are among the entities that make up DHI’s core portfolio, which had assets of around $3 billion in 2021. It would pursue global institutional investors for funding along with Bitdeer.

According to Bitdeer, the nation would get a 100 megawatt crypto mining data center. Bhutan is a mountainous nation with many hydroelectric resources, which is important to the nation’s economy. The businesses contend that hydropower offers a simple, renewable supply of electricity for bitcoin mining, an energy-intensive procedure in which computers solve mathematical puzzles to produce new currencies.

Bhutan is an excellent location for digital asset mining activities thanks to its resources and natural surroundings

Bhutan, a country that had previously been an absolute monarchy, adopted a democratic constitution in 2008 and, according to the World Bank, has had average annual growth of 7.5% since the 1980s. The nation, whose economy is heavily dependent on commerce with its neighbor India, is also one of the few carbon-negative nations in the world, meaning that it takes in more carbon from the atmosphere than it emits. A $200 per day levy is levied on visitors as part of high-end tourism, which is a significant source of income. Because Bhutan is so tall, the nation’s mountains provide the ideal climate for cooling down heated-producing machines that are actively mining for bitcoin. Hydroelectricity is also inexpensive. On paper, the nation’s crypto miners might have little to no carbon footprint.

According to Jaran Mellerud, an analyst based in Norway for bitcoin mining data company Hashrate Index, bitcoin mining could assist Bhutan in diversifying its hydropower profits, the majority of which are sold to India. According to him, Bhutan may end up becoming “the largest bitcoin miner per capita in the world.” But given the upheaval in the sector, he anticipated that the nation would have trouble raising $500 million. Every week in 2021, a miner raised $50 million to $100 million, according to Mellerud. “Now it’s significant if a miner can raise $50 million. So a bitcoin mining facility would cost $500 million in a bad market? It seems a little excessive to him.

Recommended Prasad Eswar The acquiescence of central banks to the inevitable of digital currency Both businesses have experienced the turmoil in the cryptocurrency market. Bitdeer experienced significant losses in the previous year, and since it floated via a special purpose acquisition vehicle last month, the price of its Nasdaq-listed shares has decreased by nearly a third.

Despite DHI’s denials that it lost money on the transactions, Forbes revealed last month that DHI had tens of millions of dollars in cryptocurrency with the insolvent lenders BlockFi and Celsius. Mining, according to Dahal, is the sector of the economy that is the safest. “We’re mostly sticking to the mining industry because it seems to be the least dangerous vertical.” Mellerud issued a warning, despite the fact that miners were “extremely impacted” by the crypto bad market.

Drones will be used by DHI to inspect and maintain the nation’s electricity sector’s infrastructure. The Japanese drone manufacturer Sora and DHI were in discussions last year, according to DHI, to improve technologies and even start domestic production. Drones have a hard time flying because of the steep terrain where we are, according to Dahal. Therefore, testing by drone researchers at 4,000 meters is quite interesting.

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