Bhutan grants "Blockchain identification" to its 800,000 citizens? The "National digital identity system" launched on Ethereum!

In the southern foothills of the Himalayas, a mysterious country known for its “Gross National Happiness” — Bhutan — is quietly initiating a revolution in digital governance. Recently, the Bhutanese government officially announced the grand project of migrating its “National Digital Identity (NDI)” system to the Ethereum Mainnet. This historic move not only makes Bhutan the first country in the world to deploy a national-level identification system on a public Blockchain but also outlines a new blueprint for the future of global digital sovereignty and Decentralization public infrastructure.

The first national identity system anchored on Ethereum

On October 14, 2025, a highly anticipated launch ceremony was held in Thimphu, the capital of Bhutan, where this milestone collaboration was officially announced. The guest list for the ceremony was impressive, featuring not only the Prime Minister of Bhutan, Lyonchen Tshering Tobgay, and Crown Prince Jigme Namgyel Wangchuck—who is also Bhutan's first “digital citizen”—but also key figures from the Ethereum ecosystem, including Ethereum co-founder Vitalik Buterin and Aya Miyaguchi, the president of the Ethereum Foundation.

Kongkou Li excitedly stated on social media: “This is not only a national achievement for Bhutan, but also an important step towards a more open and secure long-term digital future globally. This integration is the world's first national digital identity on-chain program, symbolizing the government's official adoption of Ethereum as its long-term public infrastructure.”

The Prime Minister of Bhutan, Lotay Tshering, also emphasized that this move aims to leverage Ethereum's globally distributed decentralized infrastructure to enhance the security, transparency, and availability of the country's critical systems. He pointed out that this milestone highlights Bhutan's commitment to creating an interoperable, user-owned identity system that connects Bhutan with the global ecosystem and aligns with the King's vision of building a secure, inclusive, and digitally empowered society.

Bhutan's “National Digital Identity System” is not simply about copying citizen information onto the Blockchain; its core is based on the advanced concept of “Self-Sovereign Identity (SSI).” This means that citizens will have absolute control over their identity data. They can securely store, manage, and selectively share their digital credentials for accessing various government platforms and online services, without having to expose all personal information to a centralized database as in traditional models.

The system cleverly combines on-chain and off-chain technologies. Sensitive personal data will be kept off-chain, controlled by the citizens themselves. What is recorded on the Ethereum blockchain is the encrypted hash of this data and the Verifiable Credentials. When identity verification is needed, such as proving age, nationality, or residence, citizens can use cutting-edge cryptographic techniques like Zero-Knowledge Proofs (ZKP) to prove to the verifier that they meet certain conditions (e.g., “I am over 18 years old”) without disclosing specific private information like their date of birth.

This design maximally protects personal privacy while achieving decentralization, auditability, and resilience, perfectly aligning with Bhutan's grand vision of “Digital Drukyul” in seeking innovation and sovereignty balance in national governance.

From private chain to public chain

The exploration of Bhutan's blockchain identification path has not been achieved overnight, but rather has undergone thoughtful evolution.

Initially, the system was built on the enterprise-level private blockchain solution Hyperledger Indy. Subsequently, to enhance privacy and scalability, Bhutan migrated the system to the Ethereum scaling solution Polygon network in August 2024. Now, the final decision to anchor the system on the Ethereum mainnet marks Bhutan's transition from a permissioned or semi-open infrastructure to a fully open, global public network.

The Secretary General of the Digital Technology Bureau of the Bhutanese government, Jigme Tenzing, explained: “We have always used Polygon to build the digital identity system, and now switching to Ethereum will further enhance the security of digital identities.” This shift reflects Bhutan's high trust in Ethereum as the world's most secure and decentralized smart contract platform, viewing it as a “digital cornerstone” that can ensure the long-term stable operation of national-level applications.

According to the official plan, the system integration has now been completed, and the identity credential data of approximately 800,000 citizens is expected to be fully migrated before the first quarter of 2026.

However, despite Bhutan's initiative being hailed as a model for digital governance, some observers have pointed out its potential risks. Placing the national identity system directly on a public Blockchain has been described as a “double-edged sword.”

Kirill Avery, the founder and CEO of the decentralized network “Alien”, stated to the media: “Transparency is good for auditability, but not so much for privacy. Once credentials are on-chain, they will exist permanently, and if handled carelessly, this permanence can quickly turn into a form of surveillance.” He believes that true self-sovereign identity requires a more challenging balance between verifiability and untraceability, and it cannot exist on infrastructure that can be unilaterally monitored by any single entity, including the state.

Bhutan's practices will undoubtedly encourage other national governments to move beyond traditional centralized control thinking and shift towards considerations of interoperability and user empowerment. However, ensuring that citizens' privacy rights are not eroded through technological and regulatory design within such a highly transparent framework will be a core challenge that this Himalayan kingdom and all global explorers must face and resolve.

Comprehensive Web3 layout

The country's digital identity on-chain this time is merely a part of Bhutan's grand strategy to embrace Blockchain and cryptocurrency technology. In recent years, this country has shown its ambition to become a “crypto-friendly” nation in multiple areas. Bitcoin Mining and National Reserves: Bhutan utilizes its rich and sustainable hydropower resources for Bitcoin mining and has become one of the important Bitcoin-holding countries globally. Although there are slight discrepancies in various data sources, it is estimated that the number of Bitcoins held by the Bhutanese government ranges between 6,000 and 11,000, valued at hundreds of millions to over a billion dollars, placing it among the top countries in terms of Bitcoin holdings. Crypto Economic Special Zone: The planned “Gelephu Mindfulness City” special administrative region has proposed to include cryptocurrencies such as Bitcoin (BTC), Ether (ETH), and Binance Coin (BNB) in its strategic reserves to support a broader digital finance strategy. Crypto Tourism Payments: The Bhutan Tourism Council has partnered with Binance Pay to integrate crypto payments into its tourism ecosystem, allowing international visitors to use digital assets to pay for hotels, bookings, and local services, aimed at modernizing tourism infrastructure. High-Level Interactions: Bhutanese officials have met with former Binance founder Zhao Changpeng (CZ), and there is widespread speculation that Bhutan may advance more crypto applications in areas such as sovereign stablecoins and Web3 public service integration in the future.

Overall, countries like Brazil and Vietnam are also conducting pilot projects for sovereign digital identity globally, but Bhutan's nationwide and comprehensive implementation undoubtedly puts it ahead of all other countries.

By building the national digital identity system on Ethereum, a global public good, Bhutan is not only creating a safer and more autonomous digital future for its approximately 800,000 citizens but also conducting a profound experiment regarding national digital sovereignty, public services, and citizens' rights. This happy country at the foot of the Himalayas is providing the world with a thought-provoking and exemplary blueprint for future governance through its vision and decisive actions.