Bhutan Takes a Step Towards Regulating Digital Currency
A New Frontier for Bhutan’s Economy
As the world becomes increasingly digital, Bhutan too has begun to explore the realm of cryptocurrency mining. The recent announcement by Druk Holding and Investments (DHI), the commercial arm of the Royal Government of Bhutan, about mining Bitcoin has sparked interest in the young and tech-savvy population.
The Rise of Crypto Currency Mining
While a few individuals have been dabbling in crypto currency for years, often on a small scale using personal computers or imported mining equipment, many are now looking to invest in this lucrative business. A tech expert who used to mine cryptocurrency revealed that he made over USD 60,000 by selling his Bitcoin at its peak price.
Criticisms and Concerns
However, critics argue that the initial intention of creating crypto currency was to decentralize transactions and make them easier, not to turn it into a lucrative investment opportunity. With big companies now dominating the mining industry, many are looking to invest in smaller, lesser-known cryptocurrencies like Pi Network, which can be mined using one’s phone.
The Need for Regulation
The private individuals mining cryptocurrency and those interested in investing want the government to recognize and regulate crypto currency. An investor shared that while there is a future in crypto, there are several challenges that need to be addressed.
- “Crypto opens up platforms to bring in investments, which can bring in revenue. The Financial Institutions in the country do not recognize crypto at the moment, and crypto is very popular among people.”
- Maintaining real identities of parties involved
- Refraining from engaging in marketing campaigns
Regulatory Framework
The Royal Monetary Authority (RMA) has established a regulatory sandbox framework for mining cryptocurrency, outlining several conditions for operations. The framework includes:
- Prior approval from the RMA for pilot projects
- Maintaining real identities of parties involved
- Refraining from engaging in marketing campaigns
Uncertainty and Opportunity
While the future of crypto currency remains uncertain, many believe that legalization would be beneficial, as it could bring in revenue through investments. The RMA’s regulatory framework aims to ensure that cryptocurrency mining complies with relevant laws and does not pose risks to the financial system.
Conclusion
As Bhutan continues to explore the world of digital currency, one thing is clear - the country needs a clearer understanding of how to regulate this emerging industry, ensuring both investor protection and economic growth. The regulatory framework established by the RMA is a step in the right direction, but more needs to be done to ensure a smooth transition into the world of crypto currency.