TL;DR

• The Himalayan kingdom of Bhutan is migrating its national identity system to Ethereum, moving away from Polygon.
• The new system is already operational; full credential migration is expected by Q1 2026.
• Bhutan previously ran its national ID on Polygon (from August 2024) and Hyperledger Indy before that.
• The move enhances data integrity, citizen control, and resilience against centralized data risks.
• Bhutan already holds over 11,000 BTC (~$1.3B), making it one of the top sovereign Bitcoin holders.

Bhutan has quietly become a testbed for forward-looking digital policy. Over the last few years, the nation has experimented with blockchain-based identity, and now it is making a bold leap: anchoring its national ID system to Ethereum's public network.

The transition is more than just a technical overhaul. It signals Bhutan's intent to build true digital sovereignty: not merely deploying identity on blockchain, but positioning citizens' credentials in a system that offers greater immutability, transparency, and user control.

Source

According to Aya Miyaguchi, President of the Ethereum Foundation, the integration is fully live now, and the migration of all resident credentials should wrap up by early 2026. At a launch ceremony, Ethereum cofounder Vitalik Buterin, Bhutan's Prime Minister Tshering Tobgay, and Crown Prince Jigme Namgyel Wangchuk were present, marking the collaboration as both symbolic and procedural.

Bhutan's Blockchain ID Journey: A Three-Phase Evolution

This isn't Bhutan's first foray into decentralized identity.

1. Hyperledger Indy - The earliest platform Bhutan adopted for self-sovereign identity.
2. Polygon (August 2024 - early 2025) - The country shifted its national ID there, likely for performance, cost, or ecosystem reasons.
3. Ethereum (2025 onward) - The latest upgrade, meant to give the system stronger guarantees and a broader infrastructure.

With each migration, Bhutan has traded incremental gains in performance, flexibility, and integration potential against the complexity of moving an entire population's identity records.

What the Ethereum-Based ID System Enables

By moving to Ethereum, Bhutan aims to unlock several capabilities:

• Verifiable credentials: Citizens can prove identity attributes (e.g. age, citizenship) without exposing full personal data.
• Digital signatures & document authenticity: State services can rely on these as legal endorsements.
• Interoperability & openness: Being on Ethereum makes it easier to interface with global identity standards, cross-chain systems, and future innovations.
• Decentralized control & auditability: Records are anchored to the public chain, allowing for robust verification and resistance to censorship or tampering.

Fintech News Singapore notes that Bhutan's design allows issuance of credentials, blockchain-native signatures, and identity proofs-all directly on Ethereum.

Bhutan’s Crypto Strategy: Not Just Identity

Bhutan’s decision to migrate its national ID to Ethereum fits into a much larger digital strategy that’s been quietly unfolding over the past few years. Beyond digital identity, the country has emerged as an unexpected heavyweight in the crypto space. It currently ranks among the top sovereign Bitcoin holders, with more than 11,000 BTC valued at roughly $1.3 billion. Those holdings were largely accumulated through state-backed mining operations powered by the nation’s abundant hydropower resources, which provide clean and inexpensive energy.

This access to renewable energy has allowed Bhutan to experiment with blockchain technologies in a way that aligns with its long-standing commitment to sustainability and Gross National Happiness. It’s also helped the country develop a foundation for other crypto-based initiatives, such as digital finance, green mining, and cross-border payments.

What makes Bhutan’s approach stand out is how seamlessly it blends traditional governance with decentralized infrastructure. While many nations remain cautious about crypto adoption, Bhutan is positioning itself as a pioneer, leveraging blockchain not just for profit, but for building transparent, verifiable systems that serve its citizens. The national ID migration is simply the latest step in that broader vision.

Risks, Challenges & Considerations

While the shift is ambitious, it is not without challenges:

• Data privacy & security: While Ethereum provides immutability, care must be taken over what data is stored on-chain vs off-chain, and how personal data is shielded (e.g., via zero-knowledge proofs).
• Migration complexity: Moving identity credentials of ~800,000 people without errors is a nontrivial exercise.
• Cost & scalability: Ethereum's gas and congestion dynamics must be managed so that identity operations remain affordable and responsive.
• Reliance on external infra: While Ethereum is robust, dependency on a public chain introduces external risks (e.g. chain upgrades, fork risks).
• Regulation & governance: Identity systems interact with legal, privacy, and civil rights domains. Ensuring alignment with national laws is essential.

What This Means for the Future

Bhutan's decision to migrate national identity to Ethereum could act as a blueprint-especially for smaller or emerging economies seeking digital resilience and citizen-first systems. If this implementation succeeds, India, African nations, or Southeast Asian countries may look closely at how shorter timeframes, migration paths, and citizen trust can be managed in blockchain-based identity platforms. On the crypto side, it further validates using Ethereum not just for finance, but for real-world government infrastructure.

Finally, Bhutan's partnership underscores a narrative shift: blockchain is no longer speculative tech-it's becoming foundational infrastructure.