Ethereum Powers Bhutan’s New Digital Identity Revolution

Bhutan has taken a pioneering step in digital governance by linking its National Digital Identity system directly to the Ethereum blockchain — becoming the first nation to operate a live, population-wide ID framework on a public network.

The upgrade allows citizens to generate decentralized identifiers and hold verifiable credentials on-chain, enabling them to confirm information like age, nationality, or residence without using centralized databases. The full transition is expected to be finalized by early 2026.

Ethereum co-founder Vitalik Buterin welcomed the initiative, describing decentralized identity as a way to return control of personal data to individuals. He said Bhutan’s decision reflects the broader goal of using open-source technology to drive meaningful, positive change.

Initially launched in 2023 with support from Input Output Global – the company behind Cardano – Bhutan’s digital ID platform followed international W3C standards for self-sovereign identity. The program’s national rollout was symbolically marked when Crown Prince Jigme Namgyel Wangchuck became the country’s first registered digital citizen.

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Industry observers see the new Ethereum integration as both groundbreaking and risky. Kirill Avery, CEO of the decentralized identity network Alien, said the move proves that governments are beginning to understand how trust can exist without centralization. Still, he warned that placing ID data directly on a public chain could compromise privacy if not carefully managed.

“Once information exists on-chain, it’s permanent,” Avery said. “That transparency improves auditability, but it can also invite surveillance. Digital identity must be verifiable without being traceable.”

Bhutan’s growing involvement with blockchain extends beyond identity systems. Earlier this year, the government’s planned Special Administrative Region, Gelephu Mindfulness City, announced plans to hold Bitcoin, Ethereum, and BNB as part of its strategic reserves.

According to data from Arkham, Bhutan holds approximately 6,370 BTC – around $725 million – making it the fifth-largest sovereign holder of Bitcoin, just above El Salvador. Its Ethereum reserves stand at roughly 656 ETH, worth about $2.73 million.

Despite the decline in Bitcoin reserves from 13,000 BTC in late 2024, Bhutan continues to position itself as one of the world’s most crypto-progressive nations, blending blockchain innovation with its national identity agenda.