Headline: Bhutan’s Gelephu region gets royal sign-off for central bank that can hold crypto reserves Gelephu Mindfulness City (GMC) has secured royal approval to convert its financial regulator into an autonomous central bank with the authority to invest in cryptocurrencies alongside traditional reserve assets. GMC announced the decree on Nov. 2, and Bhutan’s state broadcaster BBS reported that King Jigme Khesar Namgyel Wangchuck signed the measure granting the regulator full central banking powers. What changed - The Gelephu Financial Services Office (GFSO) will become the Gelephu Central Bank. Its remit will combine financial supervision with core central bank duties: monetary policy, foreign reserve management, financial stability, payment and settlement systems, and liquidity support. - Crucially for crypto markets, the authorization explicitly covers investment in digital assets and cryptocurrencies. The decree does not set a fixed allocation or specify any mandatory Bitcoin purchases. Currency powers and governance - The royal approval also paves a route for GMC to introduce its own currency — including a digital version — subject to the King’s concurrence. - GMC operates as a special administrative region of Bhutan under a “One Country, Two Systems” framework, covering more than 4,046 sq. km on the southern border with India’s Assam. It has executive and legislative autonomy and an independent judiciary separate from Bhutan’s national government. Background and reserve strategy - GMC was established by Royal Charter in February 2024 and has prioritized finance and digital assets among its key industries. Its regulator already supervises both traditional financial services and virtual asset businesses. - The region’s crypto reserve plans predate this central bank move. In January 2025 GMC identified Bitcoin, Ether and BNB as assets it intended to recognize as strategic reserves, favoring large-cap, liquid tokens on mature, monitorable blockchains. - In December 2025 Bhutan announced a Bitcoin Development Pledge committing up to 10,000 BTC to support GMC’s long-term development. That initiative ties the country’s hydroelectric-powered mining operations to job creation, skills development and economic activity, and emphasizes capital preservation, oversight and transparency. GMC says its Bitcoin reserve is accumulated by converting surplus hydropower into digital assets — a notably different provenance than government BTC holdings derived from seizures. Asset management and partnerships - In July GMC appointed Canadian digital asset manager 3iQ to manage a dedicated mandate backed by an undisclosed portion of its Bitcoin treasury. That agreement included a commitment from 3iQ to establish a long-term presence in Gelephu, train Bhutanese talent and transfer investment-management expertise. 3iQ is majority-owned by Coincheck Group (Nasdaq-listed Coincheck acquired 99.8% beneficial interest in 3iQ in February). - In an Aug. 6 interview published by 3iQ, chief strategy officer Matteo Dante Perruccio framed the mandate as protecting assets and helping “accumulate more Bitcoin for deployment into the project and the development of GMC.” Regulation, custody and staffing - GFSO guidance places traditional finance and virtual asset activities under a single Financial Services Act 2025 and supporting rulebooks. Firms must obtain a financial services license to operate in GMC. - The regulator’s public directory lists custody permissions for firms including Matrix Gelephu, DK and Ceffu Digital. BTSE Exchange is authorized to run a multilateral trading facility and provide custody services. - The transition to a central bank includes hiring more than 50 Bhutanese and international professionals across virtual asset supervision, AML, banking operations, technology, regulatory policy and macroeconomics. Why this matters Gelephu’s central bank authorization signals a rare, formal embrace of cryptocurrencies at the sovereign-reserve level, backed by a declared, domestically sourced Bitcoin supply and an intent to professionalize custody and asset management. If GMC follows through on its pledge and reserve strategy, it could become a distinctive case study in integrating renewable-energy-powered mining, institutional reserve holdings, and public-private stewardship of digital-asset exposure. Read more AI-generated news on: https://app.chaingpt.org/news