Bhutan does not measure its quality of life by Gross Domestic Product (GDP). It is measured by an indicator called Brutal National Happiness (GNH). The small South Asian country is also peculiar for other things. For example: his spectacular commitment to cryptocurrencies. Not as a reserve of value, but attention, as a way of identifying its citizens.
what has happened. Bhutan is migrating its national identification system with one based on the Ethereum blockchain, the second most important cryptocurrency in the world by capitalization. That ID system integration with Ethereum has already been completed, and the migration of all Bhutanese resident credentials will be completed in the first quarter of 2026.
A very royal ceremony. Ayya Miyaguchi, president of the Ethereum Foundation, explained in X how he traveled with Ethereum co-founder Vitalik Buterin to celebrate the launch ceremony of this new national identity card in Bhutan. They accompanied the Prime Minister of Bhutan, Tshering Tobgay, and the young prince of the kingdom, Jigme Namgyel Wangchuk, who is 9 years old, at this event. Let us remember that Bhutan is actually the Kingdom of Bhutan and as a form of government it has a constitutional monarchy.
A country dedicated to cryptocurrencies. Bhutan has been clearly favorable to this segment for years. The country has been silently mining bitcoin in the Himalayas for years, and has not gone beyond accumulating bitcoin. In fact, it is the fifth country in investment in bitcoin: it currently has 11,286 bitcoin, which is equivalent to 1,084 million euros. The only countries that have more bitcoin are the US, China, the United Kingdom and Ukraine, all of them with many more resources and populations (Bhutan has a population of 800,000 people).
They had already tried other cryptos. This is not the first move Bhutan has made to move its identification system to a cryptocurrency-based one. In August 2024 Bhutan announced the migration successful of their identification system to the Polygon blockchain, another popular cryptocurrency, but they had previously used another lesser-known crypto platform called Hyperledger Indy. The ButhanNDI App, available in the App Store, it has a very low score (1.6 out of 5) in the 65 votes registered.
Independence and decentralization. The Ethereum blockchain prevents Bhutan from being dependent on a single technology provider or centralized infrastructure, strengthening its digital sovereignty. The official announcement itself talks about how Bhutan will benefit from the improvement in “security, transparency and resilience” of the identity system.
You control your identity. The Ethereum organization itself exposes the advantages of this alternative to provide a “decentralized identity” through decentralized identifiers. That means that citizens can expose some of their personal information without depending on a government database: control over the data is moved to the individual.
But also risks. Among them, that of privacy. The Ethereum blockchain is public, and although only hashes and references to operations are noted, an identity system is especially delicate. Ethereum’s structure may impose certain fees when trading that data. There is also the fact that applying this technology can cause a digital divide to appear between citizens, in addition to raising technological dependence on third parties such as developers or security experts who know this blockchain.
Spain and Europe are going another way. For years the European Union has dreamed of having its own pan-european identity card. Our “digital wallet“It will include our ID, our driving license, a payment wallet and a password wallet, all in the same application. This app, which theoretically will be voluntary, will actually be mandatory, and its implementation and characteristics have already been raised many doubts and criticism regarding the privacy and security it will provide. There is no intention in this project to propose the use of a decentralized blockchain: the eIDAS 2.0 regulation, which requires compliance with the GDPR, the right to rectification and the right to be forgotten, for example, make it incompatible with the immutability of Ethereum.
Image | Taktsang Monastry | traxer
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