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New Hampshire’s Executive Council voted 3-2 on July 8 to reject a $100 million Bitcoin-backed municipal bond, blocking what would have been the first program of its kind in the United States despite assurances that taxpayers faced no repayment risk.
The Bitcoin-backed bond proposal, backed by Governor Kelly Ayotte and the New Hampshire Business Finance Authority (BFA), aimed to unlock private financing using Bitcoin as collateral while generating revenue for economic development. Although the council voted against the Bitcoin-backed bond, officials say they intend to revise the proposal and seek approval again.
The proposed Bitcoin-backed bond had been in development for several months after receiving preliminary approval from the New Hampshire Business Finance Authority in November last year. However, the transaction required final approval from both Governor Kelly Ayotte and the Executive Council before it could proceed.
According to reports, the BFA planned to issue up to $100 million in taxable conduit revenue bonds that would channel funds from private investors to private borrowers. Unlike traditional municipal debt, the state would not be responsible for repaying the bonds.
Instead, borrowers would pledge Bitcoin valued at 160% of the loan amount as collateral, with digital assets held by regulated custodian BitGo Trust Company. If Bitcoin’s value fell to 140% of the outstanding bond value, the collateral would be liquidated automatically to repay investors, limiting credit risk.
The three-year Bitcoin-backed bond was expected to mature in 2029.
The financing structure was developed by Wave Digital Assets and Rosemawr Management, with legal support from Orrick. Moody’s assigned the proposed issuance a provisional Ba2 speculative-grade rating for up to $100 million in taxable revenue bonds linked to a Bitcoin-collateralized borrower trust.
Business Finance Authority Executive Director James Key-Wallace argued the initiative could generate millions of dollars in fees if Bitcoin appreciated during the bond’s lifespan. Those proceeds, he said, would help establish funding for small businesses, affordable housing, childcare initiatives, and broader economic development across New Hampshire.
“Several more” deals could follow if the project succeeded. — James Key-Wallace, Executive Director, New Hampshire Business Finance Authority
Despite the safeguards built into the Bitcoin-backed bond, a majority of council members remained unconvinced.
The proposal failed after Councilor Karen Liot Hill joined Republican councilors Janet Stevens and David Wheeler in voting against it. Councilors Joseph Kenney and John Stephen supported the initiative.
Liot Hill stressed that her opposition was not directed at cryptocurrency itself but at the state’s association with a rapidly evolving asset class.
“I’m not opposed to Bitcoin or crypto in general.” — Karen Liot Hill, Councilor, New Hampshire Executive Council
She argued that approving the transaction would allow the state to “lend a kind of legitimacy to a financial transaction” involving what she described as a volatile and still-emerging industry.
Key-Wallace challenged that characterization, telling council members that Bitcoin has matured significantly over time.
Bitcoin has “emerged” and has “been around for a while.” — James Key-Wallace, Executive Director, New Hampshire Business Finance Authority
Even so, Liot Hill maintained that innovation often carries uncertainty and that Bitcoin’s relatively short history warranted additional caution before attaching the state’s name to the transaction.
The debate ultimately reflected broader questions surrounding public-sector involvement with digital assets rather than concerns over the bond’s financial engineering.
Governor Kelly Ayotte, who signed legislation in 2025 allowing New Hampshire’s state treasurer to invest in cryptocurrency and precious metals, has consistently advocated for innovation in financial policy.
Defending the proposed Bitcoin-backed bond, Ayotte argued that New Hampshire should continue embracing emerging technologies while protecting public finances.
“New Hampshire continues to thrive when we are continuing to be innovative,” — Governor Kelly Ayotte
Supporters emphasized that taxpayers would not have been exposed to repayment obligations because the debt rested entirely with private borrowers and investors.
Nevertheless, the council’s decision demonstrated that political acceptance of cryptocurrency-backed public financing remains a significant hurdle, even when independent credit analysis and collateral protections are in place.
Rather than ending the initiative altogether, state officials indicated the vote represents a temporary setback.
In an email sent on July 9, Key-Wallace said the Business Finance Authority had received “lots of support” during the council meeting and acknowledged that allowing more time for consideration was “a fair response.”
He added that the authority intends to review the council’s concerns, refine the proposal, and present the Bitcoin-backed bond for reconsideration in the future.
The outcome underscores the growing tension between financial innovation and public policy. While technical safeguards may satisfy investors and rating agencies, policymakers continue to weigh whether governments should formally associate themselves with Bitcoin-backed financial products.
The fate of New Hampshire’s Bitcoin-backed bond may therefore shape future discussions on how digital assets are incorporated into public finance across the United States.
Primary sources: Cryptopolitan News.
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