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Report on the Current Status of Retail Trading of Cryptocurrencies in Bhutan

Date: 2025-06-26

Topic: Retail_Trading_Status

Description: Assess whether individual citizens and residents in the country are legally permitted to buy, sell, and hold cryptocurrencies. Detail the regulatory environment surrounding this activity (e.g., KYC/AML requirements imposed on platforms, general warnings issued).

1. Identified Status:

Gray-Zone

2. Detailed Narrative Explanation:

The status of retail cryptocurrency trading in Bhutan is best described as a "Gray-Zone." While not explicitly banned for individuals, the regulatory landscape presents significant restrictions and a lack of clear, permissive guidelines for the general public. The Royal Monetary Authority of Bhutan (RMA), the country's central bank, has issued warnings and maintains a restrictive stance on cryptocurrency activities for the general populace, particularly concerning on-ramping through domestic financial institutions.

Historically, the RMA has cautioned against the use of cryptocurrencies. In 2014, the RMA issued a warning regarding cryptocurrencies. An October 2020 article reiterated that cryptocurrencies are not considered legal tender in Bhutan, meaning they cannot be used legally for transactions. The RMA's primary role is to ensure price and financial stability, and it is the sole currency issuing authority.

More recently, on April 30, 2025, the RMA issued its "Regulatory Stance on Crypto Currency." This statement outlines a "phased and focused strategy to crypto currency, to protect citizens and ensure financial stability while supporting responsible innovation." Crucially, this stance dictates that:
* Crypto mining and exchanges will be allowed only for Gelephu Mindfulness City (GMC) registered entities and business partners, regulated under the GMC regulatory framework.
* On-ramping for crypto trading through domestic banks regulated by the RMA will continue to be restricted.

This effectively limits direct participation in regulated crypto trading for the average Bhutanese citizen. While holding or trading cryptocurrencies obtained through other means (e.g., international platforms, peer-to-peer, though this is not explicitly addressed for individuals) isn't overtly criminalized by this specific announcement, the restriction on using domestic banking channels creates a significant barrier.

There is evidence of interest and some level of participation in cryptocurrencies among the Bhutanese population, particularly younger individuals, with some reportedly involved in mining lesser-known cryptocurrencies like Pi. Online discussions suggest individuals might use international credit cards or seek assistance from those with access to international banking to participate in crypto markets via platforms like Binance, which require KYC verification. However, attempts to use Bhutanese credit cards directly for such purchases have reportedly failed. Some international exchanges, like Gemini, list Bhutan as an available country for buying, selling, and storing crypto. This availability, however, contrasts with the RMA's restrictions on using domestic banking channels.

The Bhutanese government itself, through its investment arm Druk Holding and Investments (DHI), has been actively involved in cryptocurrency mining and holding significant reserves of Bitcoin and other digital assets. This state-level engagement is distinct from retail trading and is framed as a national economic strategy. The Gelephu Mindfulness City (GMC) is being developed as a special administrative region with its own regulatory framework, which will include digital assets like Bitcoin, Ethereum, and BNB in its strategic reserves. This further highlights the government's interest in the technology at a strategic level, but within controlled environments separate from general retail participation.

Regarding KYC/AML, Bhutan has a Regulatory Sandbox Framework for Mining Cryptocurrency, introduced in January 2019, which includes conditions for customer identification (KYC) and protection. The framework emphasizes that those involved in mining should adhere to relevant laws, including customer identification, verification, and record-keeping, and submit details of international clients to the RMA. It also prohibits promoting buying, selling, or trading of cryptocurrency inside the country or facilitating cryptocurrency services like exchanges or intermediaries without prior RMA approval. The country is also working on strengthening its general AML/CFT framework, with the Financial Intelligence Department (FID) conducting risk assessments related to Virtual Assets (VA) and Virtual Asset Service Providers (VASPs). An APG report from October 2023 noted that Bhutan still does not have a clear policy stance on VA and VASPs for the broader public, and a specific risk assessment for this sector was still in progress.

While Bhutan is exploring a Central Bank Digital Currency (CBDC), the Digital Ngultrum, with the RMA initiating a pilot program, this is separate from private cryptocurrencies. There have also been partnerships, such as with Binance Pay, to facilitate cryptocurrency payments for tourists, where the crypto is converted to fiat for local vendors. This initiative is aimed at boosting tourism and is not indicative of general retail trading permission for citizens.

In summary, while there isn't an outright ban on individuals holding cryptocurrencies, the RMA's restrictions on using domestic banking for crypto trading, coupled with the allowance of exchanges and mining only within the specific, regulated zone of Gelephu Mindfulness City, places significant limitations on retail participation. The lack of a clear, permissive regulatory framework for individual crypto trading outside of this special zone, and the historical warnings from the RMA, contribute to the "Gray-Zone" status.

3. Specific, Relevant Text Excerpts:

• Royal Monetary Authority of Bhutan (April 30, 2025): "The Royal Monetary Authority of Bhutan (RMA) will take a phased and focused strategy to crypto currency, to protect citizens and ensure financial stability while supporting responsible innovation. In line with this approach, even as the RMA continues to monitor developments in this space while strengthening Bhutan's capacity and capability on cryptocurrencies, the following stance is hereby being formally announced: Crypto mining and exchanges will be allowed only for Gelephu Mindfulness City (GMC) registered entities and business partners, regulated under the GMC regulatory framework;; On-ramping for crypto trading through domestic banks regulated by the RMA will continue to be restricted."
• Vertex AI Search result quoting an article (October 2, 2024, though the original source might be older): "Is crypto legal in Bhutan? No. Cryptocurrencies are not considered legal tender, and the authorities advise against undertaking any transactions using cryptocurrencies, warning that these are carried out at the risk of those involved."
• Business Bhutan (October 14, 2020): "However, according to Chief Executive Officer (CEO) of Thimphu Techpark, Dr Tshering Cigay Dorji, crypto currency is not a legal tender in Bhutan. “That means they cannot be used in Bhutan legally,” he said."
• Regulatory Sandbox Framework for Mining Cryptocurrency (as summarized in a May 13, 2023 article): The framework includes "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... and not engaging and or promoting buying or selling and trading of cryptocurrency inside the country, nor facilitating cryptocurrency services, such as exchanges or intermediaries."
• APG Follow-Up Report (October 2023, referencing Recommendation 15): "At present, Bhutan still does not have a clear policy stance on VA and VASPs, following which a specific and proper risk assessment has not been conducted. In January 2019, Royal Monetary Authority (RMA) promulgated a regulatory sandbox framework (framework) for mining cryptocurrency... This framework does not provide allowance for VASP."

4. Direct, Accessible URL Links to Specific Sources:

• Royal Monetary Authority of Bhutan - RMA's Regulatory Stance on Crypto Currency (April 30, 2025): https://www.rma.org.bt/announcements_detail.jsp?id=253 (Note: While the search result provides this exact title and date, the live link might need to be navigated from the main RMA announcements page if the direct link changes. The content is also summarized in search result.)
• Vertex AI Search result (summarizing Bhutan's crypto status, dated October 2, 2024, but referencing earlier RMA warnings): https://vertexaisearch.cloud.google.com/grounding-api-redirect/AUZIYQGNpVYEv1IeG201MwYm3kGT2kNK54eq4nVm2K52AzMrGi2JFxoj2wzcrhsK5LvYc0tLBfWaWLamg7SsDiWi1suQ743PgQZhPBMRTJrbZEnLRSYOJSNcBl7zNNyYmYsA9dlVqgprVrfWOULH2alW83lsNB0CUAvmVcRnyvRYP4-ZaceXimUtYnR0oot4jtSykLY37vlEgszQ0btk5Q==
• Business Bhutan - Crypto currency not a legal tender in the country (October 14, 2020): https://businessbhutan.bt/crypto-currency-not-a-legal-tender-in-the-country/
• Kuensel Online - Bhutanese doing their own crypto currency mining in Bhutan (May 13, 2023) (discussing the sandbox framework): https://kuenselonline.com/bhutanese-doing-their-own-crypto-currency-mining-in-bhutan/
• Royal Monetary Authority of Bhutan - 2023 APG FOLLOW-UP OCTOBER STREAM REPORTS WITHOUT RE-RATINGS (October 2023): https://www.rma.org.bt/wp-content/uploads/2024/02/Bhutan-FUR-Oct-Stream-2023_Final.pdf
• Reddit - r/bhutan - Where Bhutanese people buy and sell crypto in Bhutan? (User discussion, April 2025): https://www.reddit.com/r/bhutan/comments/1cdq0xu/where_bhutanese_people_buy_and_sell_crypto_in/
• Gemini - Bhutan | Areas of Availability: https://www.gemini.com/areas-of-availability/bhutan