- New Hampshire approves the first Bitcoin backed municipal bond in the United States.
- The bond uses Bitcoin as collateral to fund public projects and support innovation.
- State treasury can invest up to 5% of reserves in approved digital assets.
New Hampshire has approved a municipal bond backed by Bitcoin, creating a first for state-level public finance in the United States. The state’s Business Finance Authority authorized a $100 million Bitcoin-secured municipal conduit bond after recent policy shifts that support digital asset adoption.
The move introduces Bitcoin as collateral for public borrowing and places the state at the center of new financing models.
State Uses Bitcoin as Collateral for Public Funding
The authorization allows the state to raise funds for public projects while using Bitcoin as collateral. The bond structure connects digital assets with the global debt market, which is valued at roughly $140 trillion. Wave Digital Assets and Rosemawr Management designed the product to meet institutional standards while maintaining compliance with established municipal finance rules. Orrick supported the legal and regulatory framework.
The structure requires the borrower to post collateral equal to about 160% of the bond’s value in Bitcoin. Liquidation will occur only if Bitcoin drops below 130% of the required threshold. The model aims to reduce risk for investors while allowing institutions to gain compliant exposure to Bitcoin. The initiative follows the creation of the state’s Strategic Bitcoin Reserve earlier this year.
State Reserve Supports Expansion Into Digital Asset Finance
New Hampshire became the first state to authorize a strategic reserve for digital assets after the approval of HB 302 in May. The law allows the state treasury to allocate up to 5% of its reserves to approved digital assets with a market capitalization above $500 billion. Bitcoin is held in custody by BitGo to meet security and storage standards. The reserve also permits exposure through an exchange-traded fund.
The reserve supports the new bond by providing a framework for responsible digital asset management. Fees and returns from Bitcoin collateral will flow into the state’s Bitcoin Economic Development Fund. The fund aims to support innovation and promote economic activity related to digital assets.
The bond extends this strategy by linking public financing needs with emerging asset classes. In May, New York City revealed plans to launch Bitcoin-backed municipal bonds called BitBonds to boost crypto investment and innovation.
Market Reaction and Broader Financial Implications
Bitcoin rose by 2% to trade at $91,649 after the last 24 hours. Its lowest point was $89,300 intraday and the high was $93,745. Even with the increase in price, the trading volume decreased by nearly 15% in the same period. Moreover, the total open interest fell by 1.64% to $65.19 billion and this is an indication of continued selling pressure in derivatives markets.
State lawmakers view the bond as a controlled test of Bitcoin’s performance as high-grade collateral. The approval is a welcome development in the use of alternative financing tools as municipalities explore alternative ways of financing their public projects. This result can impact forthcoming attempts to incorporate electronic resources in conventional debt markets.
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