The Druk Holding and Investments (DHI) in a statement to the media said that it has invested in diversified future-looking investments in local and global assets including digital asset (mostly Bitcoin) mining and investment.
Officials from DHI, the investment arm of the Royal Government of Bhutan, said that it has the sole objective of bettering the lives of the Bhutanese people today and achieving a secure future for generations to follow, and manages Bhutan’s national wealth based on assets that are expected to generate steady and sustainable returns over a long-term horizon.
It said that DHI has a diversified investment portfolio including global equities, fixed income and venture capital investments in promising startups; domestic and international real estate; renewable energy including hydropower generation; health tech, biotech, life sciences and agritech; and digital asset mining and investment.
It added that with a strong risk framework in place, it also regularly rebalances holdings as markets evolve and opportunities arise.
This future-facing investment strategy is expected to build a more connected and sustainable Bhutan by deepening local knowledge and engagement in the rapidly evolving technology landscape. At the same time, it will also foster relevant human capital for industries of the future, ensuring the citizens are equipped to participate in the modern global economy from within Bhutan.
Chief Executive Officer of DHI, Ujjwal Deep Dahal said that with the investments built in traditional and future-looking areas, Bhutan is positioned to leverage some of the technologies that are taking the world by storm. One such avenue or technology by itself is the Blockchain. Enthusiasts and tech experts globally say that blockchain technology could provide the same impact as the Internet.
It provides an opportunity in which we could completely disrupt monetary and banking systems but has applications in fields as diverse as Metaverse, digital identity and digital assets amongst others.
Leveraging Blockchain, DHI has designed and built locally, its Self-Sovereign National Digital Identity (SSI) platform. “We would be the first Sovereign Government in the world to roll out the SSI-based Digital Identity in the world. This provides an opportunity for us to showcase and build credibility globally and bring us to the forefront of global innovation,” it said.
Addressing the speculations after international media coverage of DHI’s investments in cryptocurrency gleaned from the court documents of US-based crypto lenders BlockFi and Celsius, DHI said that its investments have not been adversely impacted.
These investments were made prudently, and the digital asset mining project in particular is part of the larger portfolio of DHI, which is of strategic importance for Bhutan. Ujjwal Deep Dahal said. “It is an opportunity we latched early and it provides the platform for Bhutan to be a part of next-gen technology hub apart from importantly building an asset class of the future,” he said.
The production price of the digital asset largely depends on the price of electricity, the capital cost of the project, and importantly the difficulty rate of mining. Bhutan entered in the digital asset industry when the price of Bitcoin was below USD 5,000, DHI has said, and that the current digital assets portfolio remains net positive.
Also, Bhutan having a competitive advantage of a green and relatively cheaper power, Ujjwal Deep Dahal said that the country has a “low cost of production” perhaps globally. However, considering energy as a national strategic resource, the digital asset project operates on the least priority for usage during the lean season when the country imports power.
Moving forward
The DHI said that considering the geographical landlocked constraints and connectivity challenges, it is challenging for heavy manufacturing industries to be competitive. Hence, high value-low volume manufacturing, digital products and services and importantly digital assets provide the opportunity to build our economy. “Considering this, investing in digital assets provides the opportunity for Bhutan and we have taken a calculated, conscious and bold step in DHI strategy to build our digital asset investment portfolio,” he added.
According to DHI, it will continue to prudently manage the portfolio with a view to steadily generating positive, long-term returns across traditional equity and fixed income assets; strategic investments such as renewable energy assets to advance Bhutan’s commitment to sustainability; and emerging technologies such as blockchain, artificial intelligence and machine learning systems, carbon credit platforms and the metaverse.
“DHI is looking to the future with utmost confidence, and is committed to investing today to deliver a better tomorrow for the people of Bhutan,” it added.
