New Hampshire’s Business Finance Authority (BFA) approved the issuance of a groundbreaking $100 million conduit municipal bond backed by Bitcoin, marking the first such structure at the U.S. state level.
This innovative financial instrument allows borrowers to raise capital by posting Bitcoin as collateral under traditional municipal bond regulations, without exposing the state or taxpayers to repayment risk. The BFA acts solely as a conduit issuer, overseeing the transaction while ensuring compliance.
Borrowers must post approximately 160% of the bond’s value in Bitcoin to secure the debt. If Bitcoin’s price falls below roughly 130% of the bond value, an automatic liquidation process triggers to protect investors.
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BitGo serves as the custodian for the Bitcoin collateral. The bond was designed by Wave Digital Assets in partnership with Rosemawr Management, a municipal bond specialist, and legal support from Orrick, a leading muni bond law firm.
Transaction fees and any appreciation in the Bitcoin collateral will fund the state’s Bitcoin Economic Development Fund, aimed at fostering innovation, entrepreneurship, and economic growth in New Hampshire.
This setup provides institutional investors with compliant exposure to Bitcoin within the regulated fixed-income market, potentially bridging the gap between crypto and the $140 trillion global debt sector.
Governor Kelly Ayotte, who signed New Hampshire’s Strategic Bitcoin Reserve bill into law in May 2025, celebrated the approval as a testament to the state’s leadership in adopting emerging technologies. The reserve allows the state treasury to allocate up to 5% of public funds to digital assets with a market cap exceeding $500 billion, further positioning New Hampshire as a crypto-friendly hub.
This bond represents a significant step in integrating digital assets into public finance, where crypto-backed lending has long been confined to private markets. If successful, it could serve as a blueprint for other states and municipalities to issue similar products, potentially unlocking new funding avenues for infrastructure and development projects.
Wave Digital Assets co-founder Les Borsai emphasized the goal of creating “fully institutional, fully compliant, and globally scalable” structures to connect traditional finance with Bitcoin.
This development aligns with New Hampshire’s pro-crypto stance, including its status as the first state to enact a strategic Bitcoin reserve, signaling a potential shift toward broader institutional acceptance of cryptocurrency in government-backed debt instruments.
Valued at $100 million and structured as a conduit bond, it allows private borrowers to leverage over-collateralized Bitcoin at ~160% of the bond’s value without state or taxpayer liability, with automatic liquidation triggers if BTC dips below 130% to safeguard investors.
This move builds on the state’s Strategic Bitcoin Reserve law from May 2025, which permits up to 5% of public funds in qualifying digital assets. This bond could unlock trillions in dormant capital by treating Bitcoin as “high-grade collateral” in a regulated framework, bridging crypto’s volatility with the stability of traditional debt markets.
Opens Bitcoin to the $140 trillion global bond market and $58 trillion U.S. segment, where institutions seek compliant BTC exposure without direct crypto custody risks. Could attract pension funds, insurers, and banks, potentially increasing BTC demand and liquidity; early estimates suggest similar structures might mobilize $1-5 billion in initial U.S. muni issuances.
Firms raise capital without selling BTC, avoiding taxable events and IRS scrutiny, while retaining upside potential. Lowers borrowing costs for crypto holders via lower interest rates on bonds; fosters long-term HODLing, aligning with Bitcoin’s “digital gold” narrative.
State Revenue Stream.
Transaction fees and collateral appreciation fund the Bitcoin Economic Development Fund, targeting innovation and entrepreneurship.
Could generate $5-10 million annually in fees/gains initially, spurring tech startups and job growth in New Hampshire—positioning the state as a “crypto hub” rivaling Wyoming or Texas.
Extends private crypto-lending models (e.g., DeFi platforms) to public finance, potentially inspiring BTC-tied infrastructure bonds or diversified digital asset baskets. Accelerates fintech convergence, with projections for a $500 billion “crypto-debt” subsector by 2030 if adoption spreads.
Economists like those at Wave Digital Assets argue this creates “fully institutional, fully compliant” products, turning BTC from a speculative asset into a productive one for real-economy projects like infrastructure or green energy.
As a “sandbox” for Bitcoin in government finance, this bond tests uncharted waters without upending existing rules, but it raises questions about oversight and standardization. Success here could blueprint similar bonds in other states (e.g., Florida or Tennessee), with legal templates from firms like Orrick ensuring SEC compliance and AML/KYC adherence.
Rep. Keith Ammon, who sponsored the reserve bill, called it a “test” for BTC as collateral, potentially influencing federal guidelines. The over-collateralization and BitGo custody model sets benchmarks for volatility protection, but critics worry about systemic risks if BTC crashes—e.g., mass liquidations echoing 2022’s crypto winter.
This might prompt new disclosure rules for muni bonds involving digital assets. By avoiding sales, it sidesteps capital gains taxes, but could invite IRS scrutiny on “constructive sales.” This counters debt-based economies lacking hard assets, advocating for Bitcoin-enhanced treasuries to promote equitable growth.
If replicated, it might accelerate blockchain’s role in transparent public spending, reducing fraud in the $4 trillion U.S. muni market. Beyond finance, this signals Bitcoin’s maturation as a societal tool, but it also amplifies debates on inequality and environmental impact.
As the first sovereign-grade BTC model, it validates crypto for public use, potentially drawing in conservative investors wary of spot ETFs. The development fund could address “multi-dimensional poverty” in underserved areas by funding BTC-linked ventures.
However, benefits may skew toward tech-savvy regions, exacerbating divides unless scaled inclusively. Bitcoin’s energy use draws fire, but stewards like BTCStewardship envision “BitBonds” funding ecosystem restoration—e.g., using proceeds for reforestation. This flips the narrative from “planet-killer” to “regenerative asset.”
Internationally, it could inspire nations like El Salvador with its BTC reserves to issue similar bonds, fostering a “Bitcoin standard” for emerging markets facing dollar dominance. In essence, New Hampshire’s bond isn’t just a $100 million deal—it’s a proof-of-concept that could redefine debt as an engine for innovation, provided volatility is managed.