Bitcoin News Update: New Hampshire Introduces Bitcoin-Backed Bond in a Bid to Pioneer Digital Finance

New Hampshire has set a precedent as the first state in the U.S. to greenlight a $100 million municipal bond secured by

, representing a significant advancement in merging digital currencies with conventional financial systems. The Business Finance Authority (BFA), a state-run entity, , permitting private enterprises to obtain loans using over-collateralized Bitcoin managed by custodian BitGo. This arrangement safeguards investors against cryptocurrency price swings, as a will be initiated if Bitcoin’s value falls below 130% of the bond amount.

This project,

and municipal bond expert Rosemawr Management, seeks to connect the traditional fixed-income sector with digital assets under a fully regulated and institutional structure. Borrowers are required to provide Bitcoin collateral worth 160% of the bond’s value, without liquidating their assets or triggering taxable events. The funds raised, including any fees and profits from the Bitcoin collateral, will be directed to the state’s Bitcoin Economic Development Fund to foster innovation and business expansion.

Governor Kelly Ayotte, who enacted the Strategic Bitcoin Reserve legislation in May,

, highlighting its role in establishing New Hampshire as a frontrunner in digital finance while safeguarding taxpayer interests. The state previously attracted attention by being the first to dedicate up to 5% of its treasury to digital assets, .

With the bond’s approval, the path is now open for wider use of crypto-secured debt,

. Advocates believe this approach illustrates how public and private entities can work together to responsibly harness the value of digital assets, for similar programs across the country. Nonetheless, obstacles such as regulatory hurdles and with anti-money laundering (AML) and know-your-customer (KYC) requirements still need to be addressed.

Fintech companies and institutional investors are monitoring the bond’s results closely, as it could transform municipal funding and broaden capital access for businesses, all while keeping risk levels in line with established market standards.