New Hampshire Greenlights $100M Bitcoin-Backed Municipal Bond

New Hampshire Pioneers Digital Finance with Bitcoin-Backed Bond

New Hampshire is taking bold steps toward embracing digital assets, approving the issuance of a $100 million municipal bond backed by Bitcoin (BTC). This unprecedented move at the US state level aims to bridge the traditional finance world with cryptocurrencies, opening new avenues for investors and institutions.

Details of the Bitcoin-Backed Bond

Minutes from a Nov. 17 meeting of the New Hampshire Business Finance Authority (BFA) show the board planned "to consider approving a resolution authorizing up to $100,000,000 bonds for a project to acquire and hold digital currency." Minutes from the following day record that directors voted to "approve the preliminary official intent, with no reservation, to issue a taxable conduit revenue bond for WaveRose Depositor, LLC of up to $100,000,000." According to a Crypto in America report, the bond is backed by Bitcoin (BTC) and would let companies borrow against overcollateralized BTC held by a private custodian. The state or taxpayers do not back the bond; instead, BFA approves and oversees a private deal, while Bitcoin — reportedly held in custody by BitGo — covers investors.

Collateral and Liquidation Terms

The borrower is expected to post approximately 160% of the bond’s value in Bitcoin as collateral, and if the price of BTC drops below roughly 130%, a liquidation would ensure that bondholders stay whole. According to BFA Executive Director James Key-Wallace, fees from the transaction will fund the local innovation and entrepreneurship program, the Bitcoin Economic Development Fund.

New Hampshire Embraces Cryptocurrency

The news follows New Hampshire becoming the first US state to allow its government to invest in cryptocurrencies in May after Governor Kelly Ayotte signed a bill allowing the municipality to “invest in cryptocurrency and precious metals.” New Hampshire is also working on a bill to deregulate local cryptocurrency mining operations. In late October, a committee voted 4–2 to send the measure for further review in an interim study after it had been deadlocked in the State Senate twice. The local administration is viewed as particularly welcoming to the cryptocurrency industry. In early February, Brendan Cochrane, an Anti-Money Laundering specialist at YK Law in New York City, argued that it could become an alternative for crypto companies relocating to the Bahamas. The latest moves build on a longer history of crypto engagement. Back in 2015, New Hampshire was already working on a bill that would have allowed the state government to accept tax and fee payments in Bitcoin. The bill ultimately failed in 2016, but it shows how early the local administration began to show interest in this asset class. Additionally, as early as 2016, some advocates were already arguing that New Hampshire was among the world’s most Bitcoin-friendly communities.