Bhutan is set to launch a pilot project for a central bank digital currency (CBDC) in collaboration with the Reserve Bank of India. The Bhutanese Ngultrum-backed digital currency will use India’s e-rupee infrastructure to test cashless payments in urban and rural regions.
According to Bhutan’s Royal Monetary Authority, the initiative aims to reduce cash dependency and increase financial inclusion in remote areas. The pilot project will begin in the capital Thimphu and later expand to districts like Paro and Samdrup Jongkhar. India’s Unified Payments Interface (UPI) and CBDC expertise will guide the technical framework. The project is being closely watched as a model for digital currency adoption in small, mountainous economies.
Indian fintech firms have also expressed interest in assisting Bhutanese banks with security and compliance features. Experts believe the digital currency could enhance cross-border trade and reduce transaction costs, especially between Bhutan and India. This collaboration also strengthens India’s economic and technological footprint in the Eastern Himalayan region, and Bhutan’s gradual march toward a cashless economy.