The Himalayan monarchical government has launched a gold-backed digital token through its Gelephu Mindfulness City, as announced in an email statement shared with Cryptopolitan on Thursday.
Gelephu Mindfulness City, the recently established Bhutan Special Administrative Region, has released a token named TER on the Solana blockchain. According to the Kingdom’s press statement, each TER token represents an equivalent amount of physical gold held in custody, which investors can purchase as a blockchain-based version of the precious metal.
Distribution and custody of the new token will be handled by Bhutan’s first licensed digital financial institution, DK Bank, the primary on-ramp for investors during the project’s initial phase.
In a statement included in the release, Bhutan said the token was created to give international investors a modern, accessible means of holding gold, while still benefiting from the global transferability on the blockchain network Solana.
Gelephu Mindfulness City launches digital gold
The launch of a tokenized version of gold reiterates Bhutan’s vision for Gelephu Mindfulness City, which the government hopes will attract global capital from crypto firms. The special administrative region has a distinct regulatory flexibility from the broader kingdom’s jurisdiction, much like how China uses Hong Kong as a crypto sandbox.
Matrixdock, a digital asset financial services platform, will provide the tokenization framework under a Financial Services Licence granted by the Gelephu Mindfulness City Authority in September.
The launch of TER adds to Bhutan’s digital asset ambitions of Bitcoin treasuries and crypto mining. According to data from the crypto analytics firm Arkham, the Royal Kingdom holds Bitcoins worth $540 million, approximately 15% of its nominal projected gross domestic product in 2025.
Bhutan did not accumulate its digital holdings through asset seizures or major market purchases like the West, but the kingdom began building large-scale mining operations in 2020 using its abundant hydropower resources.
“For Bhutan, it was quite obvious in a lot of ways,” said Ujjwal Deep Dahal, chief executive of the sovereign wealth fund Druk Holding and Investments, which oversaw the mining program. “We kind of look at bitcoin as a store of value, similar to gold.”
Still, the country’s embrace of digital assets hasn’t been enough to revive the numbers its tourism-dependent economy was raising. Tourism in Bhutan was heavily affected by the pandemic, and according to the Wall Street Journal, around 10% of its population has left the country over the past 5 years to seek better wages abroad.
“We are poor. Many people refer to Bhutan and Bhutanese as the happiest country in the world. We are not,” Former prime minister Dr. Lotay Tshering told WSJ.
About 70% of Bhutan’s roughly 38,000-square-kilometre territory is blanketed by forest, a level of protection safeguarded by the constitution, which mandates that national forest cover must never fall below 60%.
The country’s new Gelephu Mindfulness City is a 4,000-square-kilometre special zone being constructed along the southern border, more than five times the size of Singapore.
Regional momentum builds on Kyrgyzstan’s Gold backed USDKG
Just days before Bhutan unveiled TER, Cryptopolitan reported that the Kyrgyz Republic launched a gold-backed stablecoin pegged 1:1 to the greenback named USDKG, one of Central Asia’s first state-supervised digital token programs.
The issuer, OJSC Virtual Asset Issuer, operates under the Ministry of Finance and within the framework of Kyrgyzstan’s 2022 Law on Virtual Assets. USDKG has an initial supply of $50 million worth of tokens, and physical gold reserves fully back each unit.
The December 1 launch ceremony in Bishkek was attended by President Sadyr Japarov, Finance Minister Almaz Baketaev, and Biibolot Mamytov, the CEO of the project’s operator, Gold Dollar. The dignitaries pressed a symbolic “Launch Issuance” button to activate USDKG’s circulation.
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Source: https://www.cryptopolitan.com/bhutan-ter-gold-backed-token-solana/
