Bhutan's Bitcoin Tourism: Low Interest After Nine Months

Nine months after the Kingdom of Bhutan in the Himalayas introduced a system allowing tourists to pay in Bitcoin and other cryptocurrencies, interest remains minimal. This was determined by the online magazine Rest of World, which spoke to people in the remote country for this purpose. In a shop in the capital Thimphu, not a single purchase has been made with cryptocurrency since then; in a café, a few payment transactions were processed. Similar observations were made previously. Originally presented plans to expand the payment option to other economic sectors have not been significantly advanced, the magazine quotes an expert.

Payout in local currency

Bhutan introduced the payment option, which is based on the technology of the cryptocurrency exchange Binance, in May last year. Since then, flights, hotels, restaurant visits, handicrafts and souvenirs, as well as the visa, can be paid for with Bitcoin or more than 100 other cryptocurrencies, explains Rest of World. For this purpose, there is a QR code via which the payment can be initiated. The cryptocurrency is intended to simplify transactions mainly for foreign visitors, while merchants receive the amount directly credited in the national currency, Ngultrum. This is intended to reduce the risk, for example, from the sometimes massive fluctuations in value.

However, tourists often don't even know that payment in Bitcoin & Co. is an option at all, the magazine quotes locals. But it is unclear how many guests have cryptocurrency themselves – and would pay with it. Meanwhile, Bhutan's leadership has been investing in cryptocurrency for years: the country generates a lot of hydropower, which is used to operate mining farms. Most recently, the country sold Bitcoin worth more than 100 million US dollars; the remaining reserve is worth almost 400 million US dollars. At the same time, the remote country with around 800,000 inhabitants and a gross domestic product of about three billion US dollars according to Tagesschau has only about 300,000 visitors per year. In the past, they often complained that it was difficult to pay there. However, this previous dissatisfaction has not helped the Bitcoin payment option either.

That Bhutan's leadership wants to promote cryptocurrencies is not surprising given its large reserves, Rest of World quotes experts and locals. However, it ignores that frequent power outages and the low literacy rate are major obstacles. Those who cannot read cannot pay digitally either. To achieve truly broad acceptance, cryptocurrency would also have to be accepted in many more shops, not just where tourists shop. Because the country itself mines Bitcoin and there is no risk for merchants, the experiment is unlikely to end like in El Salvador or the Central African Republic. There, Bitcoin is no longer legal tender.

(mho)