New Hampshire has launched a Bitcoin-backed municipal bond, paving the way for crypto to enter the $140 trillion global debt market. The Business Finance Authority (BFA) approved the $100 million Bitcoin-pegged conduit bond, allowing firms to borrow against over-collateralized Bitcoin in private custody.
However, the BFA stated that while it is itself a state entity, the bond is neither covered by the taxpayer nor the government. The state-level organization supporting New Hampshire’s business growth is only acting as a mediator. The BFA said it is approving and overseeing the deal and will not assume repayment risk. Bitcoin held by BitGo will cover the investors.
The development comes a few weeks after New Hampshire became the first state to allow its treasury to invest up to 5% of public funds in crypto. That effectively created the first U.S. strategic Bitcoin reserve.
New Hampshire’s Ayotte celebrates historic Bitcoin-backed bond
New Hampshire’s Governor Kelly Ayotte celebrated the milestone, touting that the state is once again first in the nation to embrace new technologies with the historic Bitcoin-pegged bond. She pointed out that this move would open new avenues to bring more investment to the state. Ayotte signed the Strategic Bitcoin Reserve bill into law in May.
GOP Rep. Keith Ammon explained that the bond serves as a testing ground for Bitcoin’s functionality as high-grade collateral in government finance. He pointed out that the self-funded BFA could partner on this venture, prove out the concept, and possibly lead to a true Bitcoin bond issued by the state treasury.
Orion Mountain Spring, a partner at Orrick, also supported New Hampshire in launching the first municipal security backed by crypto. He emphasized that this is a game-changer for the crypto and municipal finance sectors. Orrick, a muni bond law firm, is backing the bond, and it played a significant role in helping the Granite State set up the deal.
Ammon mentioned that borrowers under the proposed deal will post nearly 160% of the bond’s value in Bitcoin as collateral. A liquidation mechanism will ensure bondholders are fully compensated if Bitcoin drops below 130%. He emphasized that this setup allows borrowers to unlock capital without unnecessary attention from the IRS or the need to sell their Bitcoin.
Key-Wallace says proceeds will go to the state’s business growth Fund
James Key-Wallace, BFA’s executive director, said fees from the bond transactions and any other gains in the Bitcoin collateral deal will be redirected into the Bitcoin Economic Development Fund. The program supports the state’s entrepreneurship and business growth.
Les Borsai, the Co-founder of Wave Digital Assets, said this is not just one transaction; it is the opening of a new debt market. Wave Digital Assets reportedly partnered with muni bond specialist Rosemawr Management to design the bond that bridges crypto and traditional debt markets. Bitcoin will be used as collateral under the same rules that govern corporate and municipal bonds. If New Hampshire’s model succeeds, other states could follow the blueprint.
Borsai claims that this structure demonstrates how the private and public sectors can collaborate to unlock the value of cryptocurrencies and their reserves in a responsible manner. The U.S. bond market alone is valued at $58.2 trillion, making it the world’s largest fixed-income market.
Meanwhile, the Wave Digital Assets executive noted that many crypto reserves today maintain idle vaults rather than using them as active financial tools. He says the BFA Bitcoin-pegged bond is a model for how crypto can be safely integrated with traditional finance and help grow the economy.
Borsai sees issuers using these reserves to earn yield, support economic projects, and back loans—all within a regulated environment. He also believes that institutional participation is required to make this possible. Retirement plans or pension funds can take cautious exposure to crypto without increasing overall risk.
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