Bhutan Takes a Giant Leap in Digital Transformation with Blockchain-Based National Digital Identity System
Thimphu, Bhutan - In a groundbreaking move, Bhutan has launched a blockchain-based National Digital Identity (NDI) system, revolutionizing the way citizens access government services and conduct digital transactions.
A Seamless Access to Government Services
The user-friendly application allows citizens to download the Bhutan NDI app directly to their mobile devices, providing seamless access to an array of government services. These include:
- Construction approvals
- Land taxes
- Passport services
- Birth and death registration certificates
- Royal University of Bhutan degree certificates
- Various business-related services
A Digital Wallet for Financial Transactions
The NDI is not just a digital identity but also a digital wallet, enabling users to link their bank accounts and facilitate financial transactions without switching between multiple apps. The Bank of Bhutan is the first financial institution to integrate with the NDI app.
Collaboration with Ripple Labs for Central Bank Digital Currency (CBDC)
The Royal Monetary Authority of Bhutan (RMA) collaborated with enterprise blockchain firm Ripple Labs in 2021 to develop and trial central bank digital currency (CBDC). This move has the potential to streamline service delivery and simplify interactions with government agencies, according to Jigme Tenzing, Acting Secretary of the GovTech Agency.
Implications for Future Digital Currency Use
“Bhutan is taking a giant leap in digital transformation,” Tenzing said. “With this system, we can virtually transform how services are provided in Bhutan, not just for citizens but also for the private sector.”
Concerns about Data Privacy
However, concerns have been raised about data privacy with the consolidation of personal information within a single platform. The GovTech Agency has emphasized the incorporation of biometric data, including fingerprint and facial recognition, to enhance identity verification and authentication.
Bhutan’s Investment in Decentralized Technology
Bhutan’s investment in decentralized technology has gained attention earlier this year when it emerged that the kingdom had invested in failed crypto lender platforms Celsius and BlockFi through Druk Holdings and Investments (DHI), its commercial arm. In May, DHI partnered with Singapore-based Bitcoin mining firm Bitdeer to develop green digital asset mining operations within the country.
The National Digital Identity Act of Bhutan 2023
The National Digital Identity Act of Bhutan 2023 received Royal Assent in July, solidifying Bhutan’s status as the first sovereign nation to implement a comprehensive decentralized identity framework.