New Hampshire has launched a $100 million municipal bond backed directly by Bitcoin, marking the first U.S. state issuance to use cryptoassets as collateral. The structure relies on overcollateralization and institutional custody to limit fiscal exposure, and it channels potential gains toward a state economic development fund denominated in cryptocurrency.
Bitcoin-Backed Bonds Enter U.S. Public Finance
The bond, approved by the New Hampshire Business Finance Authority (BFA), will finance projects run by private companies and nonprofit organizations focused on public works. Borrowers must deposit Bitcoin worth 160% of the loan principal, creating a protective buffer for creditors. If the collateral drops below 130% of the principal, an automated liquidation is triggered to protect bondholders — a mechanism designed to manage volatility without relying on taxpayer support.
The BFA functions solely as the conduit and does not assume repayment risk, shielding the state from direct fiscal liabilities. Custody of the Bitcoin collateral is managed by BitGo, which oversees institutional-grade storage and security protocols.
This issuance follows a regulatory shift from May 2025, when New Hampshire authorized its treasury to allocate up to 5% of public funds to digital assets. That decision created a Strategic Bitcoin Reserve, which now provides the legal and operational foundation for this bond structure. Wave Digital Assets and Rosemawr Management led the financial architecture, while Orrick provided legal counsel.
Wave Digital Assets co-founder Les Borsai said the initiative aims to bridge traditional fixed income with digital assets in a fully compliant, scalable format, highlighting ambitions for institutional replication. State Representative Keith Ammon described the project as a real-world demonstration of Bitcoin’s viability as high-quality collateral in public finance.
Fees generated by the program — and any appreciation of the Bitcoin collateral — will flow into the Bitcoin Economic Development Fund, which supports innovation, entrepreneurship and crypto-related skills within the state. Analysts consulted by the project’s backers argue that a successful rollout could legitimize Bitcoin’s role in debt markets and encourage other states to adopt similar models, though they stress the importance of effective volatility management and liquidation procedures.
New Hampshire’s Bitcoin-collateralized bond establishes a new legal and operational precedent for integrating digital assets into public finance, designed to protect investors while avoiding direct budgetary risks. The next milestone is the live execution of its overcollateralization mechanism and the market’s reception during the first placement round — factors that will determine whether the model is replicated nationwide.