A country that has mined Bitcoin for 8 years has established its own dedicated crypto bank.

Article by: Boaz Sobrado

Translation by: Luffy, Foresight News

「If you don't know how to do it, just avoid it.」

DK Bank CEO Zheng YD uses this phrase to explain the root cause of frequent bank disconnections faced by crypto companies. This bank is located in Glepup Mindfulness New City, a newly built area in Bhutan, and is the only licensed bank in the region. Its original purpose was to serve crypto businesses that other financial institutions avoid.

「There has long been a huge supply gap in banking services for the crypto industry,」 Zheng YD said on the podcast "On The Margin," 「The root cause is that cryptocurrencies originated from decentralized protocols, which are inherently anonymous. Banks generally lack corresponding risk control measures, and to this day, most institutions still have no way to handle it.」

DK Bank is jointly regulated by the Royal Monetary Authority of Bhutan and is at the core of a unique financial experiment. Bhutan is a small Himalayan country with a population of less than one million. Compared to GDP, the total national happiness index is the country's key development indicator. Glepup Mindfulness New City (GMC) is a special administrative region in southern Bhutan, and the project operator claims this area has independent governance rules.

「The new city is independent from Bhutan's mainland in administrative, legislative, and judicial aspects,」 said Jigdrel Singay, director of Glepup Mindfulness New City Management Bureau and head of fintech business. He describes this governance model as "One Country, Two Systems."

They target a large market that has long lacked supporting financial services. 「South Asia has about 2 billion people but no financial hub, which is a blank spot in regional financial gateways,」 Singay said. He hopes GMC can become a financial service center for South Asia, similar to how Hong Kong is to China and Singapore to Southeast Asia.

Fiat currency and stablecoins coexist in one account

DK Bank's business positioning is very clear. Zheng YD states that most banks claiming to support cryptocurrencies only handle fiat currency services for crypto companies, while digital assets still need to be managed on external platforms.

「These banks will say they won't close accounts just because you're a crypto company, but all your crypto asset transfers can't go through their channels,」 Zheng YD explained. 「We want to differentiate ourselves. We connect fiat and crypto asset systems, launching an integrated multi-currency account with crypto custody services. Users can manage USDT, USDC, and other stablecoins in the same bank account just like managing dollars, pounds, or euros.」

According to project disclosures, this account supports nine fiat currencies, along with Bitcoin pledge lending and a two-way exchange channel for fiat and crypto assets. There are two major challenges in implementation. The first is the underlying architecture: traditional banks process bulk transactions only on weekdays from 9 am to 5 pm, while the crypto market operates 24/7 in real-time. Zheng YD admits that connecting these two systems requires extremely advanced technological upgrades.

The second challenge is intercepting malicious actors. Zheng YD does not shy away from industry chaos. 「We do not deny that illegal elements exist in the crypto industry. Every industry has some proportion of non-compliant participants,」 he said. 「Therefore, the Glepup Mindfulness New City Management Bureau collaborates with DK Bank to conduct risk screening from the user admission stage.」 Risk control does not stop at account opening: 「We monitor off-chain fund flows, track complete on-chain activity, scan wallet addresses, and verify every transaction, including counterparties and transaction details.」

Zheng YD believes this track is worth deep cultivation. His core judgment is that global financial services are gradually shifting from off-chain to on-chain. 「We believe that global financial services will continue to migrate onto the blockchain, and DK Bank is determined to be a well-prepared financial institution to embrace this transformation.」

Drawing lessons from Singapore law, opening a fast-track license channel

Glepup Mindfulness New City did not build a regulatory system from scratch. 「In terms of corporate governance, we adopt Singapore common law; regulatory rules are aligned with Abu Dhabi Global Market (ADGM),」 Singay explained. 「The reason for choosing these two systems is that both are top-tier standards recognized by international investors. Companies with licenses in Singapore, ADGM, or Hong Kong can operate through a fast-track process without going through the full approval procedure again.」

There are widespread concerns that simplifying procedures might weaken regulatory oversight. Singay clarified: 「The speed-up only applies to approval processes; regulatory standards will not be relaxed. To enjoy the highest zero corporate income tax policy in the city, companies must have genuine operational entities.」 He added, 「We do not welcome shell companies or offices with no staff. Companies need to meet physical operational requirements: hire local Bhutanese employees, establish physical office space, and provide proof of daily operational expenses. Key personnel must also pass regulatory qualification reviews.」

Why is this small country building this infrastructure now?

Bhutan is not the only small sovereign country actively developing this track. Sign, a sovereign crypto infrastructure company, CEO Xin Yan has been deeply involved in this field for two years, shifting from serving crypto users to working with governments. Bhutan is one of its partner countries.

「Governments are gatekeepers for all real-world business, data, and assets,」 Xin Yan mentioned in a podcast. 「Government decision-making is very pragmatic; they won't blindly pursue Bitcoin or crypto concepts. Their core concern is only one thing: solving their own development problems.」 He pointed out that many countries face risks of external dependence. 「Currently, the main global financial infrastructure is dominated by the US and China. If either country restricts cooperation for geopolitical reasons, the financial systems of related countries will suffer shocks.」

Neo, founder of the licensed Swiss on-chain bank UR, openly states that many current Web3 projects are superficial. 「Today, both Web2 and Web3 industries are taking shortcuts: issuing USDC stablecoins, launching payment cards, and calling themselves digital banks. It looks glamorous, but the underlying architecture hasn't changed substantially.」

Neo explained that the Swiss Financial Market Supervisory Authority (FINMA) regulates based on on-chain data. The regulator directly reads blockchain data, checking wallet addresses' quarterly fund flows and holdings to determine compliance and issue operational licenses. Zheng YD said DK Bank adopts a similar regulatory logic, monitoring on-chain wallet flows and fiat funds simultaneously to safeguard the entire city’s financial security.

Since 2018, mining and Bitcoin risk hedging

Bhutan’s crypto layout is not a sudden move. Its Bitcoin mining business, leveraging hydroelectric resources, has been operating for years. Singay said mining started in 2018, and Zheng YD added: 「Since 2019, the country has scaled up mining operations. Long before most countries understood Bitcoin, Bhutan had already deeply engaged with the crypto ecosystem.」 Singay attributes this to the country’s long-term strategic vision: 「Our industry experience is the best proof. We are early pioneers in this field.」

Both leaders are reluctant to rely on a single crypto asset for national development. When asked whether Bhutan might launch a domestic cryptocurrency similar to Trump’s token, Singay said the focus is on institutional-grade crypto industry chains: mining, custody, asset management, and primary brokerage. 「Speculative tokens aimed at retail investors, at least in Glepup Mindfulness New City, are not a priority.」

Someone asked how to respond if Bitcoin prices crash and stay low for a long time. Zheng YD answered with risk control thinking from a banking perspective: 「Banking requires risk prediction. Theoretically, extreme market conditions can happen. If Bitcoin experiences a deep decline, how do we respond?」 His solution is diversification, not relying solely on Bitcoin: 「Blockchain is the underlying technology; Bitcoin is just one application. We focus on Bitcoin but also develop stablecoins, real asset tokenization, and other blockchain sectors.」

Implementation of projects involves time cycles. The crucial international airport, managed by Singapore Changi Airport, will be designed by the renowned architecture firm Bjarke Ingels Group (BIG), with completion expected by December 2029. The digital nomad visa for remote overseas workers, Zheng YD said, is still in testing. This city, emphasizing harmony between humans and nature, offers tax exemptions for foreigners, with monthly rent only $400–$500. Currently, only complete planning blueprints and DK Bank’s operational landing are available.

Whether this crypto bank can create value depends on a common industry issue. Wojciech Kaszycki, founder of the digital asset company Mobilum, explicitly states the necessity of sovereign crypto infrastructure: 「I believe every country should establish a domestic digital asset reserve institution.」

Zheng YD shares a personal experience to gently illustrate the value of small countries deploying crypto finance: 「The first time I visited Bhutan, the entire capital had only one traffic light,」 he said. 「It's not that there are few vehicles; the local car ownership isn't low. But people are courteous and orderly, and traffic flows smoothly without the need for traffic lights. When there's congestion, everyone waits quietly, without honking or urging. In today’s increasingly chaotic global environment, this kind of tolerant restraint is exactly what the global financial industry urgently needs.」 While many countries still ignore blockchain technology, Bhutan has already started Bitcoin mining; now, this Himalayan nation is further advancing to build a compliant, dedicated crypto bank.