Bhutan
Retail_Trading_Status
- Analysis ID
- #610
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- Latest
- Created
- 2025-12-12 03:54
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- 679aec34...
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Executive Summary
Retail cryptocurrency trading in Bhutan exists in a state of restricted legality, characterized by a stark divide between state-sponsored initiatives and public access. While the government actively mines Bitcoin and allows tourists to pay with crypto via a national system, the Royal Monetary Authority (RMA) restricts the general public from using domestic banks to purchase digital assets. A formal regulatory framework exists primarily for the 'Gelephu Mindfulness City' (GMC) special economic zone, leaving ordinary citizens in a gray zone where trading is not explicitly criminalized but is operationally blocked by banking restrictions.
Key Pillars
Royal Monetary Authority (RMA): The central bank which enforces banking restrictions on retail crypto trading to protect foreign reserves.
Gelephu Mindfulness City Authority (GMCA): A special jurisdiction regulator that issues licenses for crypto businesses (like Matrixport) within the GMC sandbox.
Druk Holding & Investments (DHI): The state-owned commercial arm that manages sovereign crypto mining and reserves, effectively acting as a state-level market participant.
Financial Intelligence Unit (FIU): Oversees AML/CFT compliance, with specific guidelines for virtual assets introduced in the 2025 regulations.
Landmark Laws
RMA Notice on Crypto Trading Restrictions (RMA Notification (April 2025)) - Enacted: 2025-04-30
- A formal notice stipulating that crypto mining and exchanges are exclusively permitted for entities registered within the Gelephu Mindfulness City. It explicitly reinforces restrictions on the general public using domestic banks for crypto trading.
- Source
Gelephu Mindfulness City (GMC) Enforcement Act (GMC Act No. 1 of 2024) - Enacted: 2024-12-01
- Establishes the legal and regulatory environment for the GMC Special Administrative Region, creating a licensing regime for digital asset businesses and recognizing digital assets as strategic reserves for the zone.
AML/CFT Regulations 2025 (AML/CFT Regulations 2025) - Enacted: 2025-01-01
- Updated anti-money laundering rules that include provisions for virtual assets, guiding financial compliance even though general retail access remains restricted.
- Source
Considerations
Banking Blockade: Domestic banks are instructed not to process transactions for personal crypto trading, forcing locals to use P2P or foreign cards if they wish to trade.
Two-Tier System: Tourists can freely use crypto for payments via Binance Pay and DK Bank, while locals are restricted from buying crypto assets.
Sovereign Mining: The government (DHI) is a massive Bitcoin miner, holding hundreds of millions in reserves, creating a unique environment where the state is 'long' crypto while restricting citizens.
Capital Controls: The Bhutanese Ngultrum (BTN) is pegged to the Indian Rupee, and strict capital controls are likely the primary driver for restricting retail crypto outflows.
Notes
The analysis date is December 2025. The regulatory situation in Bhutan is rapidly evolving due to the development of the Gelephu Mindfulness City (GMC). While the current status for retail is 'Gray-Zone' due to banking restrictions, the government's heavy institutional involvement suggests a long-term plan to integrate crypto into the economy, possibly leading to future liberalization for citizens once capital control mechanisms are modernized.
Remaining Uncertainties
- Can Bhutanese citizens open accounts with DK Bank to buy the 'TER' gold token, and does this act as a gateway to other crypto assets?
- Will the Gelephu Mindfulness City (GMC) regulations eventually supersede RMA restrictions for the general public?
- Are there specific penalties for P2P trading that bypass the banking ban, or is it merely discouraged?
Detailed Explanation
Detailed Explanation
As of December 2025, retail cryptocurrency trading in Bhutan exists in a state of restricted legality, characterized as a 'Gray-Zone'. This status stems from a stark divide between state-sponsored institutional activities and public access. The Royal Monetary Authority (RMA), the central bank, enforces a critical restriction by preventing domestic banks from processing transactions for personal crypto trading. This operational blockade forces local citizens to rely on peer-to-peer (P2P) methods or foreign payment cards if they wish to trade, effectively placing retail activity in a legal limbo where it is not explicitly criminalized but is severely constrained. This approach is primarily driven by the need to maintain strict capital controls for the Ngultrum, which is pegged to the Indian Rupee, and to protect the nation's foreign reserves from outflows.The regulatory framework is bifurcated and defined by specific legislation. For the general public and economy, the key directive is the RMA Notice on Crypto Trading Restrictions enacted on April 30, 2025, which formally stipulates that cryptocurrency mining and exchange activities are exclusively permitted for entities registered within the Gelephu Mindfulness City (GMC). This notice reinforces the banking restrictions on the general public. In parallel, a formal and progressive regulatory sandbox exists within the Gelephu Mindfulness City Special Administrative Region, established by the Gelephu Mindfulness City (GMC) Enforcement Act of December 1, 2024. This act creates a licensing regime for digital asset businesses, such as Matrixport, and recognizes digital assets as strategic reserves for the zone, overseen by the Gelephu Mindfulness City Authority (GMCA). Furthermore, the updated AML/CFT Regulations 2025, effective January 1, 2025, include provisions for virtual assets, providing a compliance framework for licensed entities. Key regulatory bodies include the RMA for central banking policy, the GMCA for the GMC sandbox, Druk Holding & Investments (DHI) as the state-owned entity managing sovereign Bitcoin mining and reserves, and the Financial Intelligence Unit (FIU) for anti-money laundering oversight.This creates a unique two-tier system. While locals face banking restrictions, tourists are permitted to use cryptocurrencies for payments via systems like Binance Pay and DK Bank. Simultaneously, the Bhutanese government, through DHI, is a significant Bitcoin miner and holder, indicating a state-level bullish stance on crypto as a strategic asset. The current gray zone for retail trading suggests a cautious, state-controlled approach to cryptocurrency integration, with future liberalization for citizens potentially linked to the development of modernized capital control mechanisms through initiatives like the GMC.
Summary Points
Regulatory Analysis: Bhutan (December 2025)
I. Regulatory Status
- Status: Gray-Zone for retail cryptocurrency trading.
- Nature: Restricted legality with a stark divide between institutional and retail access.
- Retail trading is not explicitly criminalized but is operationally blocked by banking restrictions.
- A formal regulatory sandbox exists exclusively within the Gelephu Mindfulness City (GMC) special economic zone.
- The state, via Druk Holding & Investments (DHI), is an active Bitcoin miner and holder of reserves.
II. Key Regulatory Bodies
- Royal Monetary Authority (RMA): The central bank that enforces banking restrictions on retail crypto trading to protect foreign reserves and maintain capital controls.
- Gelephu Mindfulness City Authority (GMCA): The regulator for the GMC special jurisdiction, issuing licenses for crypto businesses within its sandbox.
- Druk Holding & Investments (DHI): The state-owned commercial arm that manages sovereign cryptocurrency mining and reserves.
- Financial Intelligence Unit (FIU): Oversees Anti-Money Laundering and Counter-Financing of Terrorism (AML/CFT) compliance for virtual assets.
III. Important Legislation
- RMA Notice on Crypto Trading Restrictions (April 2025): Enacted April 30, 2025.
- Formally stipulates that crypto mining and exchanges are exclusively permitted for entities registered within the Gelephu Mindfulness City.
- Explicitly reinforces restrictions on the general public using domestic banks for crypto trading.
- Gelephu Mindfulness City (GMC) Enforcement Act (Act No. 1 of 2024): Enacted December 1, 2024.
- Establishes the legal and regulatory environment for the GMC Special Administrative Region.
- Creates a licensing regime for digital asset businesses and recognizes digital assets as strategic reserves for the zone.
- AML/CFT Regulations 2025: Enacted January 1, 2025.
- Updated anti-money laundering rules that include specific provisions for virtual assets.
IV. Compliance Requirements
- For businesses operating within the Gelephu Mindfulness City:
- Must obtain a license from the Gelephu Mindfulness City Authority (GMCA).
- Must adhere to the AML/CFT Regulations 2025, which include provisions for virtual assets.
- For the general public and entities outside the GMC:
- Compliance is effectively defined by the restriction on using the domestic banking system for crypto transactions.
V. Notable Restrictions or Limitations
- Banking Blockade: The RMA instructs domestic banks not to process transactions for personal cryptocurrency trading. This is the primary constraint on retail activity.
- Two-Tier Access System:
- Tourists can freely use cryptocurrency for payments via designated systems (e.g., Binance Pay, DK Bank).
- Local citizens are restricted from using domestic banks to purchase digital assets.
- Capital Controls: The Bhutanese Ngultrum (BTN) is pegged to the Indian Rupee, and strict capital controls are a primary driver for restricting retail crypto outflows.
VI. Recent Developments or Notes
- The regulatory situation is rapidly evolving due to the ongoing development of the Gelephu Mindfulness City (GMC).
- The government's heavy institutional involvement (mining, reserves) suggests a long-term plan to integrate cryptocurrency into the economy.
- Future liberalization for citizens may be contingent on the modernization of capital control mechanisms, potentially developed through the GMC framework.
Full Analysis Report
Full Analysis Report
Bhutan's regulatory landscape for cryptocurrency is a unique dichotomy of aggressive state adoption and restrictive retail policy, placing it firmly in the 'Gray-Zone' for individual traders. As of late 2025, the Royal Monetary Authority (RMA) maintains a defensive stance regarding retail participation. A crucial notification issued in April 2025 explicitly restricted domestic banks from facilitating crypto trades for the general public. This measure is designed to prevent capital flight and protect the Bhutanese Ngultrum (BTN), which is pegged to the Indian Rupee and subject to strict foreign exchange controls. Consequently, while buying Bitcoin is not explicitly criminalized in the penal code, the operational rails—bank transfers and credit card purchases—are blocked for ordinary citizens.
Conversely, the state itself is a global heavyweight in the cryptocurrency sector. Through its sovereign investment arm, Druk Holding & Investments (DHI), Bhutan utilizes its abundant hydroelectric power to mine Bitcoin at an industrial scale. Reports from 2024 and 2025 indicate the nation holds hundreds of millions of dollars in Bitcoin reserves. Furthermore, the government has established the 'Gelephu Mindfulness City' (GMC), a Special Administrative Region (SAR) with its own independent regulatory framework. The GMC Authority issues licenses to international crypto firms (such as Matrixport) and allows for a liberalized digital asset environment, but this 'sandbox' is legally distinct from the rest of the country's retail financial system.
For tourists and foreign visitors, Bhutan is surprisingly crypto-friendly. In May 2025, the government launched a national crypto payment system in partnership with Binance Pay and the local digital bank, DK Bank. This system allows tourists to pay for hotels, visas, and goods using cryptocurrencies, settled in local currency for merchants. This initiative highlights the government's pragmatic approach: utilizing crypto for inbound revenue (tourism, mining) while restricting outbound investment by citizens to maintain financial stability.
Despite the restrictions, enforcement appears focused on intermediaries rather than individual possession. There are no reports of arrests for simple holding of cryptocurrency. However, the RMA's strict oversight of the banking sector means that any Bhutanese citizen attempting to transfer funds to an international exchange faces significant hurdles. The regulatory environment is expected to evolve as the GMC framework matures, potentially offering a pathway for broader liberalization, but for now, the average resident faces a 'blocked' banking environment.
Bhutan's regulatory landscape for cryptocurrency is a unique dichotomy of aggressive state adoption and restrictive retail policy, placing it firmly in the 'Gray-Zone' for individual traders. As of late 2025, the Royal Monetary Authority (RMA) maintains a defensive stance regarding retail participation. A crucial notification issued in April 2025 explicitly restricted domestic banks from facilitating crypto trades for the general public. This measure is designed to prevent capital flight and protect the Bhutanese Ngultrum (BTN), which is pegged to the Indian Rupee and subject to strict foreign exchange controls. Consequently, while buying Bitcoin is not explicitly criminalized in the penal code, the operational rails—bank transfers and credit card purchases—are blocked for ordinary citizens. Conversely, the state itself is a global heavyweight in the cryptocurrency sector. Through its sovereign investment arm, Druk Holding & Investments (DHI), Bhutan utilizes its abundant hydroelectric power to mine Bitcoin at an industrial scale. Reports from 2024 and 2025 indicate the nation holds hundreds of millions of dollars in Bitcoin reserves. Furthermore, the government has established the 'Gelephu Mindfulness City' (GMC), a Special Administrative Region (SAR) with its own independent regulatory framework. The GMC Authority issues licenses to international crypto firms (such as Matrixport) and allows for a liberalized digital asset environment, but this 'sandbox' is legally distinct from the rest of the country's retail financial system. For tourists and foreign visitors, Bhutan is surprisingly crypto-friendly. In May 2025, the government launched a national crypto payment system in partnership with Binance Pay and the local digital bank, DK Bank. This system allows tourists to pay for hotels, visas, and goods using cryptocurrencies, settled in local currency for merchants. This initiative highlights the government's pragmatic approach: utilizing crypto for inbound revenue (tourism, mining) while restricting outbound investment by citizens to maintain financial stability. Despite the restrictions, enforcement appears focused on intermediaries rather than individual possession. There are no reports of arrests for simple holding of cryptocurrency. However, the RMA's strict oversight of the banking sector means that any Bhutanese citizen attempting to transfer funds to an international exchange faces significant hurdles. The regulatory environment is expected to evolve as the GMC framework matures, potentially offering a pathway for broader liberalization, but for now, the average resident faces a 'blocked' banking environment.
Source Evidence
Primary and secondary sources cited in this analysis
"On-ramping for crypto trading through domestic banks regulated by the RMA will continue to be restricted."
"Bhutan has partnered with Binance Pay and DK Bank to launch the world's first national crypto-based tourism payment system... allows visitors to pay with digital assets."
"AML/CFT Regulation 2025... Guidelines for Virtual Assets."
"A formal RMA notice from April 2025 stipulates that crypto mining and exchanges are exclusively permitted for entities registered within the Gelephu Mindfulness City."
"Druk Holdings & Investments, Bhutan's state-owned investment arm, is now recognized as one of the largest government entities holding Bitcoin."
Web Sources (7)
Sources discovered via web search grounding
Search queries used (8)
- Is buying bitcoin legal in Bhutan for individuals
- Royal Monetary Authority of Bhutan cryptocurrency regulation retail trading
- Bhutan Financial Intelligence Unit virtual assets guidelines
- Bhutan capital controls cryptocurrency
- Bhutan crypto mining Druk Holding and Investments retail access
- Royal Monetary Authority Bhutan "April 2025" crypto notice
- "Gelephu Mindfulness City" crypto regulations retail investors
- Digital Kidu Bank Bhutan retail cryptocurrency trading Bitcoin
https://www.lightspark.com/knowledge/is-crypto-legal-in-bhutan
https://thebhutanese.bt/more-complainants-come-forward-in-pandorabiz-src-case/
https://stablecoin.so/stablecoin-digital-asset-regulations-in-bhutan-compliance-overview-rwa-policies-template-mapping/
https://www.thecoinrepublic.com/2025/10/20/bitcoin-news-bhutan-government-moves-122-btc-worth-13-5-million-is-it-enough-to-move-the-price/
https://thedigitalbanker.com/matrixport-pursues-financial-service-permission-licence-to-offer-comprehensive-virtual-asset-services-in-bhutans-gelephu-mindfulness-city-special-administrative-region/
https://news.bitcoin.com/bhutan-goes-fully-crypto-for-tourism-in-historic-partnership-with-binance-pay/
https://coinjournal.net/news/the-kingdom-of-bhutan-launches-a-gold-backed-crypto-on-solana/