The bonds allow companies to borrow against bitcoin held by a private custodian, unlocking capital without selling cryptocurrencies or incurring taxes.
The state of New Hampshire has approved the first municipal debt instrument in the United States backed by Bitcoin (BTC).
Industry observers believe the move could open the door for digital assets to enter the global debt market, which is estimated to be worth $140 trillion.
Bitcoin-backed financing of $100 million
According to journalist Eleanor Territt, the state’s Business Finance Authority (BFA) Green light A $100 million BTC-collateralized bond was issued on Monday. This initiative allows companies to borrow money using overcollateralized BTC held by a private custodian. The security is also designed as a conduit, meaning it does not rely on taxpayer money or carry any government financial guarantees.
The offering was designed by Wave Digital Assets and Rosemawr Management, and requires borrowers to post approximately 160% of its value in the main cryptocurrency as collateral. A guarantee has also been put in place to protect investors in the event that the price falls below 130%.
This allows participants to unlock capital without selling their cryptocurrencies or creating a taxable event. Meanwhile, transaction fees and profits will be used to support the Bitcoin Economic Development Fund in the region.
The move comes just months after New Hampshire became the first state to do so Allows Its treasury to invest up to 5% of public funds in digital assets. “I am proud that New Hampshire has once again become the first in the nation to embrace new technologies with these historic bitcoin-backed bonds,” said Gov. Kelly Ayotte, who signed the bill into law in May.
Les Boursay, co-founder of Wave, said their goal is to bridge traditional fixed income with digital assets in a fully institutionalized, fully compliant and globally scalable way. Furthermore, Republican lawmaker Keith Ammon, who introduced the Granite State Bitcoin Strategic Reserve bill, described the initiative as a testbed for using assets as high-quality collateral in government finances.
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Bitcoin bonds could reach a $140 trillion debt market
Approval of this cryptocurrency-backed note has broader implications for the global debt market, which is worth about $140 trillion, with the United States making up about $58.2 trillion of that amount.
Digital asset-backed lending has been around in private markets for years, but never in US municipal finance. Why Boursay? He explained The development demonstrates how the public and private sectors can responsibly unlock the value of cryptocurrencies.
Currently, many cryptocurrency reserves remain idle, but this structure shows how they can generate yield, support loans and finance economic projects.
By creating a regulatory framework for using digital reserves as collateral, the New Hampshire model could provide a blueprint for other regions and further encourage institutional investors to explore these financing tools.
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