Bhutan, a small country in South Asia, is making big waves in the crypto world.

The kingdom, which has a population of around 770,000 people and is located between India, China and Nepal, has just made headlines after one of its cities adopted a crypto reserve strategy. This includes bitcoin (BTC), ethereum (ETH) and Binance’s BNB token (BNB).

El Salvador has previously made bitcoin part of the country’s national reserve and several other countries, including the United States, are considering similar measures to bolster its already robust economy.

But Bhutan could be an example for smaller countries where making crypto part of their national reserve strategy could have a huge economic impact.

“They’re coming out with guns blazing to show the world what’s possible in the digital asset space by bringing in foreign companies to help take advantage of the growing global interest in crypto as a whole,” said Phillip Shoemaker, CEO for Identity.com. a non-profit organization that provides decentralized identity verification.

“I see this move as potentially triggering similar actions among other governments around the world, particularly in smaller countries subject to the vagaries of currency volatility and geopolitical uncertainty,” he said.

According to a World Bank report in May this year, although Bhutan has a fairly robust economy, downside risks persist as the country’s fiscal deficit is expected to widen. To ensure economic growth, it must attract more foreign investment, the report suggested.

Bhutan listened and acted by creating Gelephu Mindfulness City, the region adopting crypto as part of its goal of “mindfulness, sustainability and innovation.”

“The special economic zone being created helps attract foreign investment, so its accumulation of digital assets more generally could be really compelling internationally,” Shoemaker said.

Bhutan was already well positioned for this move. The country has an estimated 24,000 megawatts of technically feasible hydropower potential, of which it has so far only developed about 7%.

“After all, it gets so much electricity from hydro sources and it makes sense for them to lean into the mining aspect of it,” Shoemaker said.

Bitcoin mining requires enormous energy, which has sparked concerns about the negative environmental impact of cryptomining. However, using hydropower solves this problem as it is much more cost effective and reduces the miners’ carbon footprint.

In April 2019, the country began using its vast amounts of hydropower to start mining bitcoin, according to an article by Forbes. Today, the country owns over 11,000 bitcoins worth about $1.1 billion, according to Arkham data. This puts Bhutan among the top five countries to hold bitcoin in its reserves, according to BitcoinTreasuries data.

“Bitcoin mining is especially such a great tool for harnessing various forms of renewable and stranded energy,” said Jagdeep Sidhu, Core Developer at Syscoin and President of the Syscoin Foundation. “I imagine other governments are increasingly looking at Bhutan as an example of how to launch their own Bitcoin reserves, especially countries that have abundant energy resources that might otherwise go to waste.”