Bhutan is working to decrease opportunities for money laundering while increasing the security of the financial system. Bhutan is famous for using "Gross National Happiness" - Gyalyong Gakid Palzom, formally enshrined in its 2008 Constitution – as its national goal.
However, recent developments in its financial sector have complicated the country's pursuit of national happiness. Three decades of rapid economic growth have lowered the national poverty rate.
That is positive news, but better security and infrastructure are needed as more money enters Bhutan's finance sector. New financial instruments, especially rapidly evolving digital platforms, have entered the market, exposing the country's financial system to global risks.
Bhutan also needs to develop its financial market and enhance its regulatory framework to mitigate the risk of money laundering, terrorism financing, fraud, cybercrime, and other financial crimes that could destabilize the financial system.
Fortunately, the government has recognized this and is working to address these issues.
A version of this article appears in the print on February 25, 2021, of The Himalayan Times.