New Hampshire Nears Launch of Bitcoin-Backed Municipal Bond

New Hampshire has moved a step closer to issuing a municipal bond backed by bitcoin.

The board of directors of the state’s economic development authority, the New Hampshire Business Finance Authority (BFA), approved the financing structure that will enable this municipal bond, the BFA said in a Tuesday (Nov. 18) press release.

The $100 million bond will be issued upon approval by the state’s governor and executive council, according to the release.

“This clearly positions New Hampshire as a global leader in responsible crypto finance,” James Key-Wallace, executive director of the BFA, said in the release. “We’re proud to help develop new tools that allow companies in the digital-asset ecosystem to access capital safely and effectively — while ensuring no taxpayer funds or state guarantees are at risk.”

New Hampshire Gov. Kelly Ayotte said in the release that this bitcoin-backed bond signals the state’s continued willingness to embrace new technologies.

“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,” Ayotte said.

The transaction was conceptualized by Wave Digital Assets, Rosemawr Management and the BFA, according to the release. Orrick advised the BFA on the legal structuring of the transaction, and BitGo Trust Company will serve as custodian for the bitcoin collateral.

Wave Digital Assets Co-Founder Les Borsai said in the release that this structure shows how public and private sectors can collaborate to unlock the value of digital assets and digital asset reserves.

“This isn’t just one transaction, it’s the opening of a new debt market,” Borsai said.

Orrick Partner Orion Mountainspring said in the release that this municipal security backed by cryptocurrency will set a precedent for “how municipalities can leverage emerging technologies like the blockchain to broaden their investor base, reduce the cost for funding for their constituents and open new pathways to access capital markets.”

BitGo CEO and Co-Founder Mike Belshe said in the release that the bond issuance “could redefine how digital assets strengthen public finance.”

PYMNTS reported in June that bitcoin is increasingly being used as a form of collateral in loans issued by big banks.