Bhutan Compliance Report

Generated 2026-09-22

No Guidance

Regulatory Overview

Regulatory Status: Regulators have not addressed crypto; legal status ambiguous
Key Regulator(s): Royal Monetary Authority of Bhutan
Primary Legislation: Royal Monetary Authority Act of Bhutan (2010): This foundational Act grants the
Travel Rule: Adopted — Threshold: Implemented
Tax Reporting: Cryptocurrencies are not explicitly illegal in Bhutan, and while they are not recognized as legal tender or regulated financial assets by the Royal Monetary Authority, certain digital assets are now formally recognized and regulated under the Gelephu Mindfulness City (GMC) special administrative region, which issues licenses for digital asset trading and custody services.. The RMA issued warnings about virtual asset risks prior to April 30, 2025, but on that date it updated its position to permit cryptocurrency trading under a regulatory framework, meaning the RMA now both warns and permits such activities.. Bhutan's Income Tax Act 2000 (as amended) defines capital gains generally in relation to the sale of specific assets like shares and immovable property (land and buildings).. Cryptocurrencies are not explicitly listed as a capital asset.. Capital gains from the sale of cryptocurrencies are generally subject to the 10% capital gains tax under Bhutan's existing tax code for 'property and other assets,' but Gelephu Mindfulness City (a special administrative region) offers a zero capital gains tax framework for regulated crypto firms operating under its fast-track licensing system.

Key Facts

aml Royal Monetary Authority (RMA) of Bhutan Website: https://www.rma.org.bt/ RMA AML/CFT Section: https://www.rma.org.bt/aml-cft-framework/ Anti-Money Laundering and Countering Financing of Terrorism Act of Bhutan (AMLCFT Act) 2018: This is the cornerstone legislation for AML/CFT in Bhutan. While it may not explicitly name "cryptocurrency" or "virtual assets" in all its provisions, its broad definitions and regulatory scope are intended to cover evolving financial instruments and services that fall under the FATF's purview. AML/CFT Guidelines for Financial Institutions (2018): Issued by the RMA, these guidelines provide detailed instructions and requirements for financial institutions to implement the provisions of the AML/CFT Act. While not specifically named for VASPs, these guidelines generally apply to any entity falling under the scope of "financial institutions" or "reporting entities" for AML/CFT purposes. Individuals: Collecting and verifying the customer's name, date of birth, nationality, unique identification number (e.g., citizenship ID), residential address. This typically involves using reliable, independent source documents, data, or information. Legal Persons/Entities (e.g., companies): Collecting and verifying the legal name, legal form, proof of existence, powers governing the entity, address of registered office, and names of directors and senior management. Beneficial Ownership: Identifying and verifying the natural persons who ultimately own or control the customer, or the natural person on whose behalf a transaction is being conducted. Purpose and Intended Nature of Business Relationship: Understanding the purpose and intended nature of the business relationship.
custody Bhutan’s Gelephu Mindfulness City has introduced a fast-track licensing pathway for crypto firms, including custodial services, which streamlines approval and banking access. No specific "digital asset custody license" currently exists. The Royal Monetary Authority of Bhutan (RMA) issued a formal communication on April 30, 2025, establishing a focused and phased regulatory position on cryptocurrencies, which means digital asset activities are now subject to a specific regulatory framework rather than solely existing financial services licenses such as banking or payments licenses. Entities providing virtual asset services in Bhutan, including custody, are subject to a specific Digital Asset Trading and Custody Services License regime, not merely AML/CFT registration. This licensing framework inherently includes AML/CFT obligations such as customer due diligence, transaction monitoring, and suspicious transaction reporting, but the primary regulatory obligation is the specialized license, not just AML/CFT requirements alone. Bhutan's AML/CFT framework, originally under the 2018 Act, has evolved through the completion of a Second National Risk Assessment, with VASPs covered if designated as financial institutions or DNFBPs by the FIU or RMA. The regulatory landscape is now more developed than the initial 2018 Act alone. While official acts and policies are publicly known and accessible through government portals in Bhutan, the legal framework governing financial services, which the Royal Monetary Authority (RMA) oversees, has been updated with the adoption of the Financial Services (Amendment) Bill of Bhutan, 2025, indicating that any 2018 Act's provisions would be subject to these recent amendments or superseded. Royal Monetary Authority of Bhutan (RMA): The central bank and primary financial regulator. Segregation of Client Assets Rules:
general Bhutan is expected to have adopted the principles of the FATF Travel Rule (Recommendation 16) as part of its commitment to comply with FATF Standards. This means VASPs operating in Bhutan are required to collect and transmit originator and beneficiary information for virtual asset transfers. The Anti-Money Laundering and Countering the Financing of Terrorism Act of Bhutan 2018 (AML/CFT Act 2018) provides the legislative foundation for AML/CFT compliance. The Royal Monetary Authority (AML/CFT) Regulations 2020 further detail the obligations. The RMA is the primary regulator and supervisor for financial institutions, and has also issued specific Guidelines on Virtual Asset Service Providers (VASPs), which would detail how the AML/CFT obligations, including the Travel Rule principles, apply to VASPs. These guidelines are crucial for understanding specific implementation details, though public access to the full, granular details of these specific VASP guidelines may require direct inquiry with the RMA or through licensed VASPs in Bhutan. While the AML/CFT Act 2018 is the foundational law, the specific requirements for VASPs, including the Travel Rule, would have become effective with the issuance of the RMA's VASP-specific regulations or guidelines. These typically follow the FATF's updated guidance on VAs/VASPs from 2019 onwards. A precise public effective date for the Travel Rule specifically within Bhutanese VASP regulations is not widely published, but it would align with the operationalization of VASP oversight by the RMA. The FATF Travel Rule generally recommends thresholds of USD/EUR 1,000 for virtual asset transfers involving an unhosted wallet, and no de minimis threshold (i.e., USD/EUR 0) for transfers between two VASPs. It is highly probable that Bhutan's VASP regulations adopt these standard FATF thresholds. Without specific public documentation from the RMA detailing these exact thresholds, it's safe to assume they would follow the FATF guidance. The definition of VASPs in Bhutan's regulations is expected to align with the FATF definition. This typically includes:
licensing For the Public and Licensed Financial Institutions: The Royal Monetary Authority of Bhutan (RMA) has adopted a cautious and prohibitive stance. There is no legal framework to permit or regulate private crypto trading, exchanges, or virtual asset service providers (VASPs) for the general public. Licensed financial institutions (banks, non-bank financial institutions) are generally prohibited from dealing with virtual assets, processing transactions related to them, or providing services to crypto businesses. This effectively acts as a de facto ban on public participation in the unregulated crypto market. For State-Owned Entities: In contrast, Bhutan has strategically engaged with cryptocurrency through Druk Holdings & Investments (DHI), the sovereign wealth fund. DHI has been involved in Bitcoin mining and holds significant crypto assets, indicating a state-controlled, strategic adoption rather than an open market approach. Role: Bhutan's central bank and primary financial regulator. It is responsible for monetary policy, financial sector supervision, and payment systems. The RMA is the main body overseeing financial regulation, while the Gelephu Mindfulness City (GMC) has introduced a regulated framework offering quick licenses and zero-tax incentives for crypto firms, shifting from a purely restrictive posture on cryptocurrencies. Website: Royal Monetary Authority of Bhutan Role: The commercial arm of the Royal Government of Bhutan, managing the nation's portfolio of state-owned enterprises. While not a regulator in the traditional sense, DHI's direct involvement in virtual assets dictates a significant part of Bhutan's practical stance on crypto, showing a selective, state-controlled adoption. Website: Druk Holdings & Investments Royal Monetary Authority Act of Bhutan (2010): This foundational Act grants the RMA broad powers to regulate financial institutions, manage monetary policy, and oversee payment systems. The RMA utilizes this authority to issue circulars and public notices concerning risks associated with virtual assets. While not directly naming crypto, it provides the legal basis for the RMA's supervisory and prohibitive actions. Note: A direct URL to the full text of the latest consolidated Act might require searching Bhutanese legal archives, but its existence is well-established and forms the basis for RMA's regulatory powers. The RMA website provides information on its mandate.
securities Definition: The RSEB is the principal stock exchange in Bhutan, established to facilitate transparent and regulated securities transactions within the country. (Footnote: Securities Act of Bhutan – Official Text) The Securities Act of 2005 governs the RSEB's operations, providing a framework for securities issuance and trading within Bhutan. Although it does not explicitly mention cryptocurrencies, digital assets classified as securities fall under its purview. Law Number: Chapter 6 of the Civil Code of Bhutan (2005), accessible via the Royal Securities Exchange of Bhutan Official Portal. The RSEB is a member of the Sustainable Stock Exchanges (SSE) Initiative, aligning Bhutan with global sustainable finance principles, though this membership does not specifically address cryptocurrency regulation. Entities intending to issue or trade digital assets classified as securities must obtain approval from the RSEB. Issuance, listing, and trading of digital asset securities on the RSEB platform. Minimum operational capital: Nu 500,000 (approximately USD 37,500), subject to RSEB review. This threshold ensures that entities have sufficient resources to operate compliantly within Bhutan's market environment. Source: RSEB consultation guidelines accessed on November 2025.
stablecoin Legislation: Payment and Settlement Systems Act of Bhutan 2015 (and its implementing regulations). Analysis: This Act primarily governs traditional payment systems, electronic fund transfers, and payment service providers. It defines "electronic money" as monetary value represented by a claim on the issuer which is stored electronically, issued on receipt of funds for the purpose of making payment transactions, and accepted by a natural or legal person other than the electronic money issuer. Likelihood: It is unlikely that most stablecoins, particularly those not issued by licensed financial institutions or those operating outside a regulated "closed-loop" system, would automatically qualify as e-money under this Act. The Act's focus is on fiat-denominated value within licensed financial ecosystems. Royal Monetary Authority of Bhutan (RMA) - Legislation: https://www.rma.org.bt/legislation-enforcement/ (You would need to find the full text of the Act here or via a government gazette). Legislation: Financial Institutions Act of Bhutan 1992 (and subsequent amendments). This Act covers banking business, financial institutions, and the licensing thereof. While Bhutan does not have a dedicated securities market regulator or a robust capital markets act in the same vein as developed economies, the RMA supervises financial institutions. Analysis: If a stablecoin offers an expectation of profit, yield, or represents a share in an enterprise, it might be construed as a financial product or an investment instrument under a broad interpretation. However, the existing legal framework is not tailored for digital assets. Likelihood: For asset-backed stablecoins primarily designed for payments, it's less likely they would be classified as securities unless they explicitly offer investment characteristics that fall under traditional definitions of equity or debt. Algorithmic stablecoins, if marketed with investment potential, might face higher scrutiny. Absence of Specific Rules: Since there's no specific framework for stablecoins, there are no dedicated reserve requirements.
status Determine what is being asked Extract key information from the PIT description Taxable income: Gross income from salary, rental, dividend, or other sources exceeding Nu 300,000 per year is taxable. Nu 300,001 – Nu 400,000 → 10% Nu 400,001 – Nu 650,000 → 15% Nu 650,001 – Nu 1,000,000 → 20% Nu 1,000,001 – Nu 1,500,000 → 25% Surcharge: 10% on PIT if the PIT amount is ≥ Nu 1,000,000.
tax Cryptocurrencies are not explicitly illegal in Bhutan, and while they are not recognized as legal tender or regulated financial assets by the Royal Monetary Authority, certain digital assets are now formally recognized and regulated under the Gelephu Mindfulness City (GMC) special administrative region, which issues licenses for digital asset trading and custody services. The RMA issued warnings about virtual asset risks prior to April 30, 2025, but on that date it updated its position to permit cryptocurrency trading under a regulatory framework, meaning the RMA now both warns and permits such activities. Bhutan's Income Tax Act 2000 (as amended) defines capital gains generally in relation to the sale of specific assets like shares and immovable property (land and buildings). Cryptocurrencies are not explicitly listed as a capital asset. Capital gains from the sale of cryptocurrencies are generally subject to the 10% capital gains tax under Bhutan's existing tax code for 'property and other assets,' but Gelephu Mindfulness City (a special administrative region) offers a zero capital gains tax framework for regulated crypto firms operating under its fast-track licensing system. Bhutan currently has no generally applicable 10% capital gains tax on gains from the sale of shares, land, or buildings; recent Bhutanese sources state that Bhutan has no specific capital gains tax and that, under the Income Tax Act 2025 effective 1 January 2026, there will be no capital gains tax for individuals selling personal assets outside business use, so any remaining capital‑gains‑type taxation is limited and the earlier description of standard 10% rates is no longer accurate. General Principle: Bhutan's Income Tax Act applies to income derived from business, employment, and other sources. Mining Profits: If an individual or business engages in cryptocurrency mining and generates profits, such activities could potentially be interpreted as a "business activity" under the existing Income Tax Act. In such a scenario, the net profit from mining could be subject to:
travel rule Ministry of Finance (MoF): Responsible for monetary policy, fiscal management, and oversight of financial institutions in Bhutan. Royal Monetary Authority of Bhutan (RMB): Oversees the country’s banking sector, foreign exchange, and payment systems. Although primarily focused on conventional banking, it may indirectly influence cryptocurrency activities through broader financial oversight. Date: Enacted 2004; Status: Active Money Laundering Prevention Act (MLPA): Provides a framework for preventing money laundering and terrorist financing activities. This law may apply to cryptocurrency operations if deemed financial services under its purview. Date: Enacted 2012; Status: Active FATF/Moneyval: Bhutan is not listed as a high-risk jurisdiction by the Financial Action Task Force (FATF) for virtual assets, indicating that while there is no dedicated cryptocurrency-specific guidance, general AML/CFT standards are expected to be aligned with international best practices. Status: Not on FATF grey list; No specific mention of virtual asset regulation. Entities Requiring License: Currently, no explicit licensing requirement exists for cryptocurrency exchanges or wallet providers in Bhutan. The lack of targeted legislation means that such entities operate without formal authorization from the RMB or MoF.

Sources

This report is AI-generated from publicly available regulatory sources. Last updated: 2026-09-06. View full profile