‍1 Introduction  

In recent years, Bhutan has been tapping into its hydropower advantages and using a state-driven strategy to build up Bitcoin mining operations, sparking a real "green mining revolution." According to data from Arkham Intel released on June 27, 2025, the country has accumulated 12,062 Bitcoins since 2020, making it the world's third-largest sovereign Bitcoin holder. This stash is about 40% of Bhutan's GDP, turning it into one of the countries most exposed to cryptocurrency assets globally. In July 2025, Bhutan rolled out a nationwide crypto payment system, letting tourists pay for visas, flights, and local goods with cryptocurrency—making it one of the first places to enable crypto payments across its entire tourism scene. Binance CEO Richard Tang wrote a letter to Bhutan, saying it's paving a new path for cryptocurrency innovation, building national vision on trust. But here's the contrast: while Bhutan's cryptocurrency industry is booming fast, its cryptocurrency tax and regulatory system is still pretty rough around the edges and just getting started.  

2 Bhutan's Take on Cryptocurrency and Its Basic Tax Policies  

2.1 How Bhutan Views Cryptocurrency  

Bhutan's attitude toward cryptocurrency is pretty cautious—they don't treat it as legal tender but as a regulated asset with limits. That said, it doesn't stop Bhutan from warming up to crypto assets more and more. Especially in January 2025, Bhutan's special administrative region, Gelephu Mindfulness City (GMC), announced plans to include Bitcoin (BTC), Ethereum (ETH), and Binance Coin (BNB) in its strategic reserve framework (at the regional level)—a groundbreaking move, with laws and implementation details still in the works. This shows Bhutan's view of cryptocurrency has gone beyond just goods or property, elevating it to the level of national strategic reserve assets.  

2.2 Basic Tax Policies and How They Stack Up Internationally  

2.2.1 A Quick Overview of Bhutan's Tax System  

Bhutan's tax system got modernized pretty late—starting in the 1960s, the government slowly introduced monetary taxes, and the 2001 Income Tax Act of the Kingdom of Bhutan set up a modern comprehensive income tax system covering individuals and businesses. The 2000 Sales Tax, Customs and Excise Act handled indirect taxes. Right now, Bhutan's tax setup mainly includes personal income tax, corporate income tax, sales tax, and customs and excise duties. They've recently passed new bills like the Income Tax Bill of Bhutan 2025 (shortened to the Income Tax Act below) and the Goods and Services Tax Bill of Bhutan 2025 (shortened to the Goods and Services Tax Act below) to modernize things further. Currently, sales tax, customs, and excise are under the 2000 Sales Tax, Customs and Excise Act, with specific rates set by the Ministry of Finance (sales tax is 7% now). But Bhutan plans to switch to a 5% Goods and Services Tax (GST) starting January 2026 to replace the current sales tax. Since the new laws kick in on January 1, 2026, this article will focus on them for the intro.  

2.2.2 Personal Income Tax  

Bhutan's personal income tax uses a progressive rate system, going from 0% to 30%, and it applies to citizens, residents, and anyone else earning income in Bhutan if their yearly income tops 300,000 Ngultrum. The 2025 Income Tax Act merges the old personal income tax (PIT) and business income tax (BIT) under personal income tax to simplify things.

2.2.3 Corporate Income Tax  

Bhutan's corporate income tax covers companies, groups, and significant economic presence. According to the new Income Tax Act, the rate is 22%, down from the previous 30%, to draw in investments and boost business growth.  

2.2.4 Sales Tax and the Upcoming Goods and Services Tax (GST)  

Right now, Bhutan's sales tax is 7% and applies to most goods and services. But starting in 2026, they'll implement a 5% Goods and Services Tax (GST) to replace the sales tax, unifying the system, making compliance easier, and aligning with international standards.  

2.3 Cryptocurrency Tax Policies and the Latest Updates  

Bhutan hasn't put out any specific tax laws just for Bitcoin or other cryptocurrencies. Even though the country is into cryptocurrency mining and supports digital infrastructure, it doesn't see cryptocurrency as legal tender and doesn't offer special tax breaks. Under Bhutan's current tax laws, anything related to cryptocurrency—like income from mining, investing, trading (selling or swapping), accepting cryptocurrency as payment for goods or services, or even just holding digital assets—could trigger existing tax types.  

When the 2024 Income Tax Act was revised, Bhutanese mainstream media reported that, according to officials from the Department of Revenue and Customs, the revisions would consider treating cryptocurrency and other digital assets as sources of personal income tax. However, the new Income Tax Act doesn't explicitly define cryptocurrency as Taxable Income. Instead, it lays out four types of taxable income: Income from Employment, Income from Business, Income from Investment, Income from Other Sources; and it only treats cryptocurrency as a form of "Supplies of Digital Assets," which counts as "Digital Services." So, Bhutan is still playing it safe with cryptocurrency taxes, and the specifics are pretty vague. But it's clear that businesses providing crypto asset services will pay corporate income tax at 22%. Also worth noting is that when cryptocurrency is seen as property for tax purposes, it often comes with Capital Gains Tax. By interpreting the current Income Tax Act, Bhutan could still tax related gains as "Income from Investment" or "Income from Other Sources" based on holding time and transaction type. As for the Goods and Services Tax, the new law doesn't specify if cryptocurrency trades are taxable.  

3 Bhutan's Regulatory Framework for Cryptocurrency  

3.1 The Basics of Bhutan's Cryptocurrency Regulatory System  

Bhutan's regulatory setup has shifted from pilots to full rollout. The Royal Monetary Authority (RMA) mainly handles cryptocurrency regulation, starting with the 2019 RMA-issued "Cryptocurrency Mining Regulatory Sandbox Framework," which stresses strict compliance for crypto-related businesses. This framework ensures mining fits national laws, protects investors and consumers, and backs innovative tech uses. More specifically, it requires cryptocurrency mining companies to follow KYC and AML rules and get different kinds of RMA approvals to prevent misuse of cryptocurrency for illegal stuff and avoid financial risks. In 2024, Bhutan tightened things up, requiring cryptocurrency businesses operating there to get licenses and do full risk disclosures to protect cryptocurrency investors. This framework focuses on anti-money laundering and investor protection, lining up with FATF standards and global concerns about the safety and integrity of financial transactions in cryptocurrency.  

3.2 The Latest Updates on Bhutan's Cryptocurrency Regulatory System  

Bhutan has a positive, open vibe toward cryptocurrency—not just accepting it but weaving it into national strategies, like building Bitcoin sovereign reserves, using hydropower for green mining, and treating it as a tool for economic diversification. In this process, Bhutan keeps updating its cryptocurrency regs.  

According to the Royal Monetary Authority's announcement on May 30, 2025, the latest notice "RMA’s Regulatory Stance on Crypto Currency," the RMA will take a phased, targeted approach to cryptocurrency regulation, balancing citizen rights and financial stability while supporting responsible innovation. Based on this policy, while keeping an eye on industry trends and building up national cryptocurrency capabilities, the RMA officially stated the following positions:  

(1) Cryptocurrency mining and trading businesses are limited to entities registered in Gelephu Mindfulness City and partner companies, and they must follow the GMC regulatory framework;  

(2) Cryptocurrency trades through RMA-regulated domestic banks will continue to be restricted.  

The latest regs show that, despite some limits, Bhutan's future policies might keep supporting cryptocurrency growth. Keep in mind Bhutan's famous "Gross National Happiness" idea—its cryptocurrency policies could stay cautious, emphasizing investor protection, sustainability, and social benefits to balance economic innovation with financial stability.  

4 International Comparisons and Future Outlook  

4.1 International Comparisons  

Comparing Bhutan to other countries focused on cryptocurrency development highlights some big differences: First, in terms of monetary systems, El Salvador made Bitcoin legal tender across its whole economy, pushing cryptocurrency with real legal force, while Bhutan hasn't declared any cryptocurrency as legal tender and hasn't shaken up its fiat system. Second, on the driving forces, unlike Switzerland's private innovation and market-driven blockchain push, Bhutan gets involved through state entities like Druk Holding & Investments and DK Bank, integrating cryptocurrency into national plans—similar to how the US keeps legislating on crypto assets. Third, for global positioning, places like the UAE and the US are aiming to be global crypto hubs, but Bhutan's different—its crypto strategy isn't about being a world center but empowering local goals, like boosting regional connectivity, openness, and financial inclusion through widespread crypto payments to support tourism.  

When it comes to tax system details, Bhutan's setup has its own flavor. Its tax policies are relatively relaxed, allowing cost deductions and using progressive rates, which is friendly to small investors. Meanwhile, fellow South Asian country India slaps a flat 30% tax on cryptocurrency income and doesn't let losses offset other income, making the tax environment tougher. But compared to European spots like Portugal that lure cryptocurrency users with tax perks, Bhutan doesn't widely offer breaks—it focuses on everyday uses like merchant payments and digital tools to promote cryptocurrency locally. At the same time, versus the US, another big Bitcoin sovereign holder, the US has more detailed, transparent laws on cryptocurrency taxes and regs to keep its leading spot; Bhutan doesn't have dedicated cryptocurrency tax types but spreads cryptocurrency income across existing taxes and categories, with a simpler but cautious regulatory framework.  

4.2 Future Outlook  

On the regulatory side, Bhutan's cryptocurrency system mixes caution with open innovation, especially with anti-money laundering and investor protection regs that align with international standards. But transparency could use a boost, and details need polishing—there's some uncertainty, especially with ongoing geographic limits and controls per the latest announcements. In the future, Bhutan could become a global model for green cryptocurrency development, with policies continuing to support growth, focusing on capacity building, risk isolation, and sovereign control, and refining regulatory details.  

On taxes, Bhutan's system is in transition. Recent tweaks to personal and corporate income taxes show the government's balancing act between economic growth and social fairness, and the GST rollout will simplify the structure more. That said, without specific laws or guidelines, Bhutan's stance on taxing cryptocurrency is still a bit fuzzy, leaving related tax matters in a gray area. Looking ahead, Bhutan's tax policies might head toward more transparency and efficiency, but for cryptocurrency tax specifics, things could stay as they are for a while. On one hand, that gives flexibility for handling cryptocurrency tax issues; on the other, it brings uncertainty and risks. We believe Bhutan's positive attitude toward cryptocurrency will push it to quickly shape tax frameworks that favor the industry's growth.

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