A $100 million issuance could open the doors of digital assets to the $140 trillion global debt market.
According to reporting by Crypto In America and Eleanor Terrett, on November 17 the New Hampshire Business Finance Authority (BFA), the state’s enterprise financing agency, approved a $100 million municipal bond backed by bitcoin. The product will allow businesses to obtain loans using bitcoins – held with a private custodian and over-collateralized – as collateral.
Although the BFA is a state entity, this municipal bond is not guaranteed by the State or by taxpayers. The agency acts as a conduit, approving and overseeing the operation without taking on repayment risk. Investors, instead, are protected by the bitcoins held in custody by BitGo.
The initiative comes just a few months after the State became the first in the U.S. to authorize its treasury to invest up to 5% of public funds in digital assets.
Governor Kelly Ayotte commented:
“I’m proud that New Hampshire is once again first in the nation to embrace new technologies with this historic Bitcoin-backed bond. 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, a digital asset manager, in collaboration with municipal bond specialist Rosemawr Management, designed this product to connect digital assets with the traditional debt market, using bitcoin as collateral under the same rules that govern municipal and corporate bonds.
“Our goal is to bridge traditional fixed income with digital assets in a way that’s fully institutional, fully compliant, and globally scalable,” said Les Borsai, co-founder of Wave.
Republican representative Keith Ammon has described the bond as a sort of “sandbox” to test how bitcoin can function as high-quality collateral in government finance.
The technical structure
Under the proposed structure, the borrower must deposit about 160% of the bond’s value in bitcoin as collateral. If bitcoin’s value drops below roughly 130%, an automatic liquidation mechanism ensures bondholders are fully repaid. Ammon explained that this setup allows borrowers to unlock capital without selling their bitcoins or triggering taxable events.
According to James Key-Wallace, executive director of the BFA, the fees generated from the bond transaction—along with any gains on the bitcoin collateral—will flow into the Bitcoin Economic Development Fund, a program designed to support innovation, entrepreneurship, and business growth across the state.
The operation is supported by the law firm Orrick, which specializes in municipal bonds and helped New Hampshire structure the deal. “We are excited to support New Hampshire in launching the first municipal security backed by cryptocurrency,” said Orion Mountainspring, partner at Orrick
The global bond market is worth around $140 trillion, with the U.S. market alone reaching approximately $58.2 trillion, making it the largest fixed-income market in the world.
