New Hampshire’s plan to issue what backers call the world’s first Bitcoin-backed municipal bond goes before the state’s Executive Council on Wednesday, the last approval the $100 million project needs before it can move forward, The Boston Globe reported today.
Governor Kelly Ayotte, who has called the effort “historic,” and the five-member council will hold a public hearing Wednesday morning at the request of James Key-Wallace, executive director of the New Hampshire Business Finance Authority.
Key-Wallace asked the council to find the proposal feasible and beneficial to the public and to authorize the quasi-governmental agency to proceed. He has said the model would position the state as “a global leader in responsible crypto finance.”
The structure differs from a conventional municipal bond in a key respect: no public money is at stake. Rather than the government repaying investors, a private borrower does. The borrower is CleanSpark, a Bitcoin mining company that posts Bitcoin as collateral.
Bond payments are funded from proceeds tied to that collateral, and investors gain upside exposure through additional payments linked to Bitcoin price appreciation. If the price falls below a set threshold, a trust holding the collateral can be liquidated to repay bondholders in full.
Digital asset firm Wave Digital Assets is set to administer the transaction, while BitGo would serve as custodian, holding the Bitcoin in regulated cold storage.
Moody’s has noted that “no public funds of the State of New Hampshire or any political subdivision thereof may be used to pay amounts under the rated bonds.”
New Hampshire’s push for bitcoin
The idea is part of a broader push to draw blockchain business to New Hampshire, a state that in 2025 became the first to pass a strategic Bitcoin reserve law. Supporters argue the bond gives the Business Finance Authority a revenue stream to fund its investment programs without exposing taxpayers to Bitcoin’s price swings.
That volatility remains the central concern. Because the three-year bond relies on a fluctuating asset as collateral, a downturn could trigger an automatic liquidation before the term ends.
Documents Key-Wallace submitted to the council argue the state is shielded because the loan agreement creates a conduit between private investors and a private borrower, with the cryptocurrency serving as collateral rather than any government guarantee.
Ratings reflect the risk. Moody’s assigned the bonds a provisional “Ba2” rating — two notches below investment grade — labeling them speculative with substantial credit risk, a tier often described as “junk.” Keith Ammon, a Republican state representative active in the state’s crypto policy, told the Granite State News Collaborative that the rating “makes sense” as a cautious starting point given the novelty involved.
Outside analysts have raised further questions. David Krause, an emeritus finance professor at Marquette University, examined the plan and found that recent Bitcoin price movements would be “highly likely” to trigger the liquidation provision, according to The Boston Globe.
While the state would be “legally insulated from direct financial liability,” Krause wrote, introducing so volatile a form of collateral challenges the transparency, predictability, and stability that municipal finance has historically emphasized, and shielding the state from liability does not remove reputational risk.
“While the bond may serve as a proof of concept for integrating digital assets into structured finance, it is not well suited as a general-purpose public finance tool,” he concluded.
A vote in favor Wednesday would clear the Business Finance Authority to issue the bond.