El Salvador And Bhutan – How Two Small Nations Led The National Bitcoin Reserve Race

El Salvador and Bhutan, two nations that were not as globally recognized as others due to their lower standings in economic prowess, are now making a name in the financial world for this reason: Bitcoin.

Both countries have adopted a Bitcoin strategy that is now paying off as the value of the world's first decentralized cryptocurrency has grown significantly over the past few years.

In an exclusive interview with International Business Times, Agne Linge, Head of Growth at the first on-chain non-custodial neo bank WeFi, discussed El Salvador and Bhutan's ventures into the world of BTC and how other nations may benefit from similar initiatives.

El Salvador – Bold Moves in the Face of Doubt

Salvadoran President Nayib Bukele received much criticism in 2021 when his country adopted BTC as a legal tender. "Many expected its big 'economic gamble' to fail," Linge said, adding that three years later, "most countries are beginning to see how costly it might be to ignore the growing asset class in the long term."

Bukele's BTC gamble didn't end in 2021. It only started late in 2022, when he announced that his country would buy 1 Bitcoin daily regardless of market action. As of early Friday, the treasury had over 5,948 Bitcoins. "I told you so," Bukele famously wrote on X as BTC prices struck above $90,000.

"Today, El Salvador has raked in a substantial gain on its Bitcoin holdings, and its success is now helping it repair its relationship with the International Monetary Fund (IMF)," Linge noted.

Last week, Bloomberg reported that the Central American nation now has a "high chance" of striking a staff-level agreement with the IMF in December for a loan of around $1.4 billion.

It is worth noting that earlier this year, the IMF remained skeptical of El Salvador's Bitcoin strategy, saying it wanted the country to address risks around Bitcoin first before a deal for an IMF-supported program is agreed on.

Times have changed since. BTC prices surged dramatically after Americans elected Donald Trump earlier this month. The world's top digital currency beat its previous all-time highs to spike above $99,000.

It is unclear whether Bitcoin's price surge affected the IMF's views over El Salvador's BTC bet, but it appears the country now has a better shot at getting a loan from the United Nations' financial agency.

Bhutan – A Silent Stacker

Bhutan, a small sovereign state landlocked in southern Asia, has slowly, surely, and silently built a massive billion-dollar BTC treasury in the last few years. Unlike El Salvador, the Kingdom of Bhutan took a different path.

"Bhutan's embrace of Bitcoin is another example of the strategic use of national resources. Its BTC stash remains a major source of revenue following the latest market boom," Agne said.

In the case of Bhutan, the government engaged in mining pools and also built its own mining operations over the course of a few years. Its digital wallet, which was recently uncovered by leading on-chain analytics firm Arkham Intelligence, shows that the wallet continues to receive BTC from its mining operations managed by Druk Holding and Investments, the Kingdom's premier investment company.

Bhutan has over 12,000 BTC (worth some $1.1 billion) as of early Friday. It also has a stash of other coins such as Ether (ETH) and Apu Apustaja (APU).

Linge noted that unlike El Salvador who bought BTC, the Bhutanese government's treasury is "a valuation from spot price growth rather than more investment."

For Linge, Bhutan's strategy is one of the books. "Rather than let excess electricity go to waste, it deployed it efficiently into mining Bitcoin, and it might reap the dividends for much longer," she said.

The Role Leadership Played in the Revolution

The success stories of both El Salvador and Bhutan have deep roots in leadership. For one, Bukele has remained steadfast despite much skepticism, while Bhutan retained silence as it built its mining operations.

"Bhutan's and El Salvador's Bitcoin adoption is one of deep conviction by their leaders. As widely acknowledged, this adoption is still experimental, and once larger economies make similar strategic reserve moves featuring Bitcoin, the perceived risks and fears might be eliminated," Linge pointed out.

The gap in global adoption has been a major hurdle for El Salvador's BTC strategy, which is why the country continued to stack up its coins while also encouraging educational initiatives that raise more awareness about the innovation's benefits.

Linge believes that the adoption gap will change if the Trump administration and his allies stay true to their promise, especially in the establishment of a U.S. strategic reserve. "If this happens, more nations might potentially follow the U.S.'s leadership to go all out on the coin," she projected.

Which Countries Will Benefit the Most from a $BTC Strategy?

Bhutan and El Salvador are smaller nations whose economies have had much slower growth than others, but they have proven that the right strategy can help boost growth.

For Linge, "developing nations with limited foreign exports will benefit more from a well-executed Bitcoin investment strategy. The benefits are high, with the risk-reward notably being one of the most profitable among globally recognized assets," she pointed out.

Countries with cheap energy, like El Salvador, may also benefit from such a strategy, specifically for those who want to attract miners.

Bigger countries like the U.S. that are planning to embrace a Bitcoin reserve by reallocating some of their gold reserve funds to BTC, can also benefit.

While some nations are already in discussions for proposals to incorporate BTC into their national reserves, Linge warned that ignoring the apparent changes in views around the world "could mean falling behind in a rapidly evolving digital landscape."

Indeed, broader adoption is the key hurdle that Bitcoin and other cryptocurrencies have to overcome. WeFi is leading the charge in encouraging the transition to digital offerings. "We understand how people's financial needs have evolved over time," especially in developing and emerging economies, Linge said.

Through its mission of disrupting the financial status quo, WeFi is enabling crypto payments and facilitates remittances through its native stablecoin. It also makes banking services accessible from mobile devices, and Linge said WeFi is ready to provide the necessary infrastructure support for countries looking to integrate Bitcoin as part of national strategic growth.