Bhutan is rebuilding the core of its digital identity framework on Ethereum.
The effort, confirmed by Aya Miyaguchi of the Ethereum Foundation, is part of the Himalayan kingdom’s broader experimentation with emerging technologies. This shows that blockchain, once limited to transactions and tokens, is now being tested as public infrastructure.
Miyaguchi said the move will ensure that by 2026, all 800,000 people will have verifiable blockchain-protected identities that they can control directly from their devices.
This further illustrates how Bhutan’s identity program has rapidly evolved from 2023 onwards.
The National Digital Identity was first launched through the ceremonial registration of Her Highness Gyalsi, a symbolic gesture marking Bhutan’s entry into the digital age. Its first version ran on Hyperledger, a permissioned blockchain favored by enterprise pilots.
By 2024, governments have migrated to Polygon, attracted by lower fees and zero-knowledge proofs that allow users to verify themselves without exposing personal data.
But less than a year later, government officials decided that a move to Ethereum would provide the country with unparalleled decentralization and global security.
GovTech Agency Director-General Jigme Tenzing reportedly said:
“Ethereum is one of the most decentralized blockchains in the world and is virtually immune to disruption. This transition strengthens both the security and stability of digital identities.”
Why Ethereum and why now?
Bhutan’s move reflects a global rethinking of personal information management amid a rise in identity theft.
According to the World Bank’s ID4D dataset, nearly 850 million people around the world still lack official identification documents, and an additional 3.3 billion people lack digitally verifiable records. As a result, many people remain unqualified and excluded from the financial system and public services.
Governments have attempted to solve this problem with centralized databases, but these systems are notoriously expensive to maintain and vulnerable to breaches.
In the United States, 22% of Americans have been victims of identity theft, and the Federal Trade Commission (FTC) will receive more than 1 million complaints in 2023. These thefts often target the elderly and result in losses of over $10 billion.
Given this, Bhutan’s answer is to reverse that model by allowing citizens to manage their own credentials rather than entrusting them to a central registry.
Miyaguchi revealed that the new NDI will follow a self-sovereign identity architecture built on decentralized identifiers and verifiable credentials.
This will ensure that each Bhutanese citizen will have an encrypted wallet that can be accessed via smartphone. The wallet stores certificates such as date of birth, address, educational background, etc. This data is verified by cryptographic proof.
This change dramatically changes the cost equation. The World Bank estimates that traditional ID programs cost between $5 and $10 per user per year, especially in low-income countries.
Bhutan’s blockchain model could bring that down to less than $1, depending on transaction fees and validator costs.
Additionally, Bhutan’s implementation comes as momentum for digital identity modernization increases.
The United Nations Joint Staff Pension Fund recently completed a blockchain-based authentication system for 70,000 beneficiaries in 190 countries.
The results were amazing, with a 40% reduction in paperwork, a 95% reduction in archiving costs, and nearly 100% user digital retention, according to a report from a global authority.
Bhutan is also aiming for similar results on a national scale.
What benefits does this bring to Ethereum?
If the effort is successful and large-scale adoption is secured, the project could become the first country to demonstrate that public infrastructure can rely on an open, permissionless chain like Ethereum.
Mr. Miyaguchi said:
“This milestone is not only a national achievement, but also marks a global step towards a more open and secure digital future in the long term.”
Furthermore, this initiative would be a soft power victory for Ethereum itself, reinforcing its image as the default payment layer for money and metadata.
At the same time, Bhutan’s experiment could accelerate the tokenization of real-world assets such as land ownership, educational backgrounds, and professional qualifications that rely on verifiable identity.
In particular, Ethereum is the leading blockchain platform for RWA tokenization, controlling 62% of all tokenized assets, including tokenized currencies, commodities, government bonds, etc.
