New Hampshire Set to Issue World’s First Bitcoin-Backed Municipal Bond

New Hampshire Leads with First Ever Bitcoin-Backed Municipal Bond

New Hampshire has made a groundbreaking move in the world of finance with the approval of a financing structure by the Business Finance Authority (BFA) board of directors. This decision enables New Hampshire to become the first state globally to issue a municipal bond secured by bitcoin.

$100 Million Inaugural Issuance: A Digital Asset Milestone

This pioneering issuance worth $100 million reflects a significant advancement in blending digital assets with traditional capital markets. The initiative was ideated by Wave Digital Assets in collaboration with Rosemawr Management, an esteemed alternative investment manager centered on municipal and sustainable infrastructure sectors, and the BFA. Orrick played a key role in advising the BFA on the transaction’s legal structuring while BitGo Trust Company, Inc. will be responsible for the bitcoin collateral custody, ensuring it is stored securely in a regulated cold storage.

Bridging the Gap between Digital Assets and Traditional Debt Markets

Wave aims to create a system where bitcoin can act as a reliable collateral under the same regulations governing municipal and corporate bonds. According to this proposed structure, investors can purchase the BFA-issued bonds. This step accentuates New Hampshire’s forward-thinking approach and establishes it as a leader in digital finance.

Opening New Debt Market with Bitcoin-Backed Bonds

Embracing this innovative method to deliver more investment opportunities, New Hampshire stands as a pioneer in issuing this historic bitcoin-backed bond. Les Borsai, the co-founder of Wave Digital Assets, described the move as the commencement of a new debt market designed to seamlessly merge traditional fixed income with digital assets. The BFA’s transaction fees will go towards establishing the Bitcoin Economic Development Fund, further advancing business growth and financial innovation in New Hampshire.

Setting the Pace for Municipalities Leveraging Emerging Technologies

Orrick partner Orion Mountainspring expressed his excitement in supporting New Hampshire’s groundbreaking move to launching the first municipal security backed by cryptocurrency. He highlighted how this model showcases how municipalities can leverage emerging technologies to expand their investor base, reduce funding costs, and access capital markets in innovative ways. New Hampshire’s growing fintech ecosystem gets a further boost as a New Hampshire Statutory Trust will hold the bitcoin trust for this bond.

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