From a "Land of Happiness" to a financial zone: why BIT chose Bhutan's regulation

When most people think of Bhutan, they think of "Gross National Happiness," the Himalayas and negative carbon emissions. Few know that the country is building a financial special zone on its southern border, with regulatory rules benchmarked directly against Singapore and Abu Dhabi.

Matrix Gelephu Pte. Ltd., part of the BIT Group, holds a financial services license issued by Bhutan's Gelephu Financial Services Office (GFSO) right there. Why choose Bhutan? What protection does regulation here offer users? To find out, we interviewed David Peters, Managing Director of GFSO.

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Beyond happiness, Bhutan builds a financial special zone

For a long time Bhutan's economy relied mainly on hydropower exports and tourism, with limited room for growth, and how to create more opportunities for the next generation became a real question facing policymakers. In December 2023, Bhutan offered its own answer: establish Gelephu Mindfulness City (GMC) on the southern border. The word "mindfulness" carries Bhutan's fundamental thinking about national development: combining sustainable development, spiritual well-being and commercial success. The city's underlying character comes from Buddhist tradition — compassion and prudence, and a long-term, deep care for people. Yet its positioning is that of a special economic zone open to the world. GMC borders India, covers 2,500 square kilometers — about three times the size of Singapore — and has its own commercial laws and financial regulator, operating separately from the legal system in the rest of Bhutan.

This approach is not unfamiliar. The Dubai International Financial Centre (DIFC) is a precedent: located in the UAE, which follows a civil law system, it nonetheless has its own common law courts and regulator, and has grown since 2004 into a leading financial center in the Middle East. GMC is taking the same path.

One financial special zone, three key choices

Borrowing mature laws rather than starting from scratch. GMC did not legislate on its own. "GMC Law No. 1 (2024)," which took effect on December 26, 2024, introduced 18 Singaporean laws and 10 Abu Dhabi Global Market (ADGM) financial regulations. ADGM is one of the world's earliest financial centers to regulate crypto assets. Companies therefore enter a mature common law system, not a permissive "register and you're in" zone.

Treating digital assets as core. Bhutan was mining Bitcoin with surplus hydropower years ago and is one of the sovereign countries holding the most bitcoin. In January 2025, GMC added bitcoin and ether to its strategic reserves; in December of the same year, Bhutan pledged to allocate up to 10,000 bitcoin to support city construction.

Aligning with mature markets. Starting in May 2026, companies already regulated in Singapore, ADGM or Hong Kong can complete registration, regulatory review and bank account opening together through an accelerated channel. The state-backed DK Bank serves as partner bank, offering multi-currency accounts and on- and off-ramps between fiat and crypto assets.

As a GFSO official put it, GMC's advantage is that it "can start from zero," benchmarking against the best practices of the world's leading financial centers without inheriting rules that are "layered, relatively complex and sometimes even contradictory."

How Bhutan's regulation protects user assets

GFSO does not regulate by institution type; it focuses on what an institution actually does and the risks involved. In the interview, David Peters said: "Without lowering standards, regulation can also be efficient and forceful."

Specifically, this framework protects user assets at three stages: who can enter, how oversight continues, and how problems are handled when they arise.

Strict entry thresholds. A license application must meet requirements in three areas. First, transparency of ownership and personnel: ultimate beneficial owners must be clearly traceable, and shareholders and senior management must pass a "fit and proper" review covering integrity records and whether they have been subject to any sanctions. Second, substantive operating capability: companies must establish an independent risk and compliance team and empower it to suspend trading or products; hold capital sufficient to absorb potential losses; and establish anti-money laundering measures and submit to independent oversight by the Gelephu Financial Intelligence and Compliance Centre (GFICC) rather than relying on self-certification. Third, ongoing compliance: these requirements must be met continuously throughout the license period, not only at the time of application.

The greater the risk exposure, the more frequent the review. GFSO assigns each licensed institution a dynamic risk score and sets the frequency of full reviews accordingly. Platforms holding assets for retail users are reviewed more often than companies serving only a small number of institutional clients. Between reviews, early-warning mechanisms continuously monitor the data institutions report; once capital falls abnormally or reports show anomalies, checks may be launched ahead of schedule. If problems are not remedied, GFSO can restrict the institution's business, up to revoking its license.

Even if an institution stops operating, client assets have a clear destination. Client assets must comply with applicable segregation and custody requirements. If a licensed institution enters liquidation, applicable client assets are handled under established distribution and insolvency rules, which are designed to facilitate the return of those assets to clients. In the regulator's words, GMC's common-law-based insolvency regime ensures that client assets "will not be misused to pay off the financial institution's own debts."

Why BIT chose Bhutan's regulation

In its global operations, BIT upholds core compliance principles: every product is provided by an operating entity with a clearly identified identity, holds the relevant license or regulatory status where required, and operates within clearly defined regulatory frameworks, governance structures and business boundaries. GMC meets this principle on three grounds:

First, regulatory coverage matches. GMC covers digital assets, traditional finance and fintech at the same time; for a platform connecting crypto and traditional markets, every business line has rules to follow.

Second, the standards are internationally accepted. The rules are built on ADGM and reference Singapore and Hong Kong, so partners, audit firms and institutional clients can measure them against familiar standards.

Third, it focuses on actual operations. GMC considers company formation, operational preparation and banking arrangements together. A licensed institution needs available banking channels at the same time as it obtains its license in order to serve clients reliably.

Take BIT Securities as an example. BIT Securities is operated by Matrix Gelephu Pte. Ltd., part of the group, and holds a financial services license issued by Bhutan's GFSO; US and Hong Kong stock trading services are provided respectively through a US-registered broker-dealer and a partner broker holding a Type 1 license from Hong Kong's Securities and Futures Commission (SFC). As a licensed operating entity, BIT Securities must comply with the GMC regulatory requirements applicable to Matrix Gelephu Pte. Ltd.'s licensed business, including ongoing supervision, client asset protection and anti-money laundering controls.

This is also the meaning of BIT's choice to accept strict regulation. From account opening to trading and custody, the relevant services are provided under applicable regulatory frameworks and controls, embedding user protection at the institutional level.

Closing thoughts

Choosing to be licensed means the platform always operates under supervision. These constraints are not easy, but they answer the two questions users care about most: who is managing my assets, and who is supervising this company.

The digital asset industry is entering a new phase. The standard for measuring a platform is no longer the speed of product launches or the pace of expansion, but whether regulation is clear, governance is sound and infrastructure is reliable. Bhutan responded to this trend with a financial special zone built from zero, and BIT's choice to be licensed here is also a response to this trend.

For BIT, strict regulation is an asset. The group will continue to advance compliance, risk control and global operational capabilities, winning users' long-term trust with capabilities that stand the test of time.

Disclaimer: This article is for informational reference only and does not constitute any investment advice, an offer or a solicitation of an offer. The availability of each product and service depends on applicable laws and regulations in the user's jurisdiction, the platform's qualification review process and the relevant terms of service. Different products and services may be provided by different entities and subject to different regulatory frameworks, terms of service and risk disclosures.

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