New Hampshire Authorizes $100 Million Bitcoin-Backed Municipal Bond

New Hampshire has approved a $100 million municipal bond backed by Bitcoin, the first government-backed adoption of this type of collateral structure. 

The state’s Business Finance Authority (BFA) authorized the issuance and will act as a conduit rather than a guarantor.

Under the model, private borrowers can obtain financing by posting over-collateralized Bitcoin held by BitGo, according to Crypto in America. 

The bond does not place repayment risk on the state or taxpayers.

Governor Kelly Ayotte, who earlier this year signed legislation allowing the state treasury to hold limited digital-asset positions, commented on the approval. 

“I’m proud that New Hampshire is once again first in the nation to embrace new technologies with this historic Bitcoin-backed bond,” she said. 

“This is an innovative way to bring more investment opportunities to our state and position us as a leader in digital finance without risking state funds or taxpayer dollars.”

Wave Digital Assets and Rosemawr Management structured the bond using conventional municipal-finance rules applied to Bitcoin collateral. 

Borrowers must post roughly 160% of the bond’s value, with an automated liquidation mechanism if collateral falls to around 130%.

State Representative Keith Ammon, who sponsored the digital-asset reserve legislation, has described the initiative as a way to evaluate Bitcoin’s effectiveness as collateral while allowing companies to borrow without selling their holdings.

The state worked with Orrick for legal counsel during the formation of the bond framework.

BFA Executive Director James Key-Wallace said fees from the transaction and any appreciation in posted collateral will go to the state’s Bitcoin Economic Development Fund, which supports business and technology projects.

While crypto-backed lending exists in private markets, this is the first instance of a U.S. municipal agency adopting a Bitcoin-collateralized structure. 

Its implementation may influence how other states consider similar approaches.

HB 302, the “Strategic Bitcoin Reserve” law enacted earlier this year, permits the state to hold digital assets with market capitalizations above $500 billion, currently only Bitcoin, up to 5% of total funds, with assets required to be held in U.S.-regulated custody.