Bhutan: A royal decree opens the reserves of the future central bank of Gelephu to cryptos

Cryptocurrencies in the mandate of a central bank. A royal decree paves the way for the transformation of Gelephu Financial Services Office into Gelephu Central Bank, Bhutan. Announced on November 2, the decision allows the future institution to invest in digital assets alongside conventional reserves.

This authority will exercise its functions in Gelephu Mindfulness City, a special administrative region located in the south of the kingdom. Its implementation timetable and coordination with the national central bank remain to be clarified.

Key Points

A royal decree gives central banking powers to Gelephu's financial regulator.

Its mandate authorizes investments in cryptocurrencies, without requiring the purchase of a particular token.

The system provides for the possibility of a local currency, possibly digital, with the agreement of the king.

The operational modalities and relations with the national monetary authority have not yet been publicly detailed.

Gelephu prepares a central bank empowered to invest in crypto

King Jigme Khesar Namgyel Wangchuck has granted the Gelephu regulator an expanded mandate, according to the city's official announcement. The institution must evolve into an autonomous central bank.

Its skills will cover monetary policy, reserve management, financial stability and supervision of establishments in the zone. It will also be able to develop payment and settlement systems, as well as provide liquidity support when necessary.

The crypto component appears explicitly in the powers announced. According to state media Bhutan Broadcasting Service, the bank will be allowed to invest in digital assets and cryptocurrencies, in addition to traditional reserve assets.

The decree also opens up the possibility of a currency specific to Gelephu, including in digital form. Its introduction, however, would require the king's agreement: no immediate issue has been announced.

Local autonomy whose functioning remains to be defined

Gelephu Mindfulness City has a distinct administrative and legal framework, while remaining an integral part of Bhutan. Established by royal charter in February 2024, this border region of India makes finance and digital assets one of its priority sectors.

However, the announced autonomy does not allow us to conclude that there is a complete separation from the national monetary system. The Royal Monetary Authority remains the central bank of Bhutan and the issuer of ngultrum notes and coins. According to Daily Bhutan, the terms of cooperation between the two institutions on foreign exchange, payments and monetary policy have not yet been publicly explained.

The composition of reserves, the rules for storing cryptocurrencies and risk limits also remain to be established. Implementation requires specialized teams: more than fifty positions have been announced, particularly in the supervision of virtual assets, payments and the fight against money laundering.