New Hampshire is now the first State in the US to launch a Bitcoin-backed municipal bond officially. It is also the world’s first government-approved BTC bond entering the financial markets. Digital assets are slowly entering the government sector, which was once considered taboo. Orrick, which is one of America’s top finance law firms, helped architect the deal.
The Business Finance Authority (BFA) of New Hampshire approved the $100 million Bitcoin-backed conduit municipal bond this week, allowing private companies to borrow against over-collateralized Bitcoin held in custody. New Hampshire is not shying away from new technologies but is instead embracing them.
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Under the newly approved model, borrowers must post approximately 160% of the bond’s value in Bitcoin. However, if the value of the collateral drops below 130%, the automated liquidation mechanism comes into play, making sure bondholders are protected. This makes borrowers unlock capital without having the need to sell their Bitcoin.
However, the newly-launched Bitcoin bond in New Hampshire does not use taxpayers’ money, and the BFA only acts as a facilitator. The BFA will approve and oversee the deals, but the repayment risk solely rests on the Bitcoin collateral. Companies with long-term BTC holdings could gain the most from the newly-launched bond.
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New Hampshire’s Latest Bitcoin Bond Making Waves
A string of pro-Bitcoin policies is making its way into the US and other countries. New Hampshire is also the first State to authorize and allocate 5% of public funds in reserve bills into digital assets. The State also created America’s first strategic Bitcoin reserve.
“I’m proud that New Hampshire is once again first in the nation to embrace new technologies with this historic Bitcoin-backed bond,” said Governor Kelly Ayotte. “This positions us as a leader in digital finance without risking State funds or taxpayer dollars.” The move now drives financial technological innovation across New Hampshire.