New Hampshire Pioneers Bitcoin Municipal Bonds - Crypto Meets Public Finance
New Hampshire just dropped a financial bombshell - they're launching the nation's first Bitcoin-denominated municipal bond. This isn't just another crypto headline; it's public finance doing what Wall Street hasn't dared to attempt.
The Crypto-Government Convergence
Municipal bonds meeting Bitcoin creates a hybrid financial instrument that could reshape how local governments raise capital. Forget traditional treasury departments - we're talking blockchain integration at the state level.
Why This Changes Everything
This move bypasses conventional banking channels entirely. No middlemen, no traditional underwriters taking their cut - just direct crypto-powered municipal financing. It's either revolutionary or recklessly ambitious, depending on which finance veteran you ask.
The Ripple Effect
Watch other states follow suit if this succeeds. Failed projects could set crypto adoption back years, but success? That rewrites the municipal finance playbook permanently.
Because apparently, traditional bonds with their predictable returns just weren't exciting enough for today's yield-chasing investors. Welcome to public finance - crypto edition.
How the Bitcoin-backed bond works
The bond was created by Wave Digital Assets and Rosemawr Management. Under its terms, borrowers must post roughly 160% of the bond’s value in Bitcoin.
If the value drops below roughly 130%, an automatic liquidation mechanism protects bondholders. This lets companies raise capital without selling their Bitcoin or triggering taxes.
Fees and any gains from the collateral will FLOW into the Bitcoin Economic Development Fund, which supports innovation and business growth in the state. Law firm Orrick assisted in structuring the deal, emphasizing its potential impact on municipal finance.
A new model in U.S. municipal finance
Crypto-backed lending has been common in private finance, but it has never entered the U.S. municipal bond world. The global bond market is enormous, worth about $140 trillion worldwide and roughly $58 trillion in the United States.
New Hampshire’s experiment breaks that pattern. If the structure works, it could provide a template for other states to explore Bitcoin-backed borrowing in a regulated public setting.
Wave Digital Assets’ Les Borsai views the BFA’s Bitcoin-backed bond as a first attempt to bridge that gap. He says the structure shows how digital assets might be used responsibly in traditional finance and could eventually draw interest from major institutions once bond ratings arrive. That momentum, he added, could lead to new products tied to fixed-income markets, expanding far beyond the ETF boom of recent years.
Other states are joining the Bitcoin movement
This development follows New Hampshire’s decision in May to pass the country’s first Bitcoin Reserve Bill, which allows the state treasury to invest up to 5% of public funds in digital assets with a market cap of at least $500 billion. At the moment, only Bitcoin qualifies.
Not just New Hampshire, Texas, and Ohio have also passed moving towards Bitcoin-focused legislation, signaling broader national momentum.
Texas has gone a step further by creating the Texas Strategic Bitcoin Reserve under SB21, becoming the first state to hold Bitcoin using public funds. Such a reserve will be maintained separately from the general treasury for the purpose of increasing financial resilience and hedging against inflation.
Ohio is also entering the race. Senator Sandra O’Brien has introduced Senate Bill 57, proposing an Ohio Bitcoin Reserve Fund that WOULD let the state treasurer invest in Bitcoin for at least five years under strict security rules.
Together, Texas, Ohio, and New Hampshire show that state-level Bitcoin adoption is accelerating across the U.S.
Also Read: Tether Invests in Ledn to Drive Bitcoin-Backed Lending Growth
