New Hampshire has taken a significant step in the realm of cryptocurrency by advancing plans for the state’s first-ever issuance of a $100 million bitcoin bond. This novel financial instrument will be managed by a state agency but underpinned by a private-sector firm. According to the New Hampshire Business Finance Authority (NHBFA), the issuance of these bonds is aimed at acquiring and holding digital currency.
The NHBFA’s recent agenda noted the approval of “$100,000,000 bonds for a project to acquire and hold digital currency.” While the NHBFA does not directly manage state-backed bonds, it encourages private-sector entities to facilitate their administration. Once an agreement is finalized, the proposal will be presented to the New Hampshire Executive Council, which will decide whether to grant final approval for the initiative. If approved, it would mark a historic moment as the first of its kind in the nation.
James Key-Wallace, the executive director of the NHBFA, expressed pride in the development of new tools that enable companies within the digital asset ecosystem to access capital efficiently and safely. Importantly, he emphasized that this initiative poses no financial risk to taxpayers or state guarantees. The NHBFA, a self-funded organization established to enhance New Hampshire’s economic development, intends for the proceeds from this bond project to be reinvested back into its operations. Key-Wallace mentioned that the crypto assets returned to the state as fees would be utilized to establish a pioneering crypto-backed economic development fund.
The bond issuance is being facilitated by the investment adviser firm Wave Digital Assets in collaboration with Rosemawr Management, while custody of the collateral will be managed by BitGo.
State Representative Keith Ammon, a long-time proponent of pro-cryptocurrency policies in New Hampshire, highlighted that this bitcoin bond initiative is designed as a model for future endeavors. He noted that bitcoin could serve as a partial buffer against the state’s escalating inflation, stating, “This is like training wheels to get to that point, protecting our state’s finances from future devaluation of the dollar.” The two-year bond will depend on the appreciation of bitcoin over its term.
Despite a challenging year for cryptocurrencies, in which Bitcoin has experienced a drop of around 6% following a rise over several months, New Hampshire retains its status as a leader among state governments pursuing progressive crypto policies. Earlier this year, the state became the first to establish a crypto reserve, acting swiftly in contrast to federal authorities, who are still in the initial planning stages of cryptocurrency regulation and integration.
This pioneering effort aligns with New Hampshire’s continued commitment to exploring innovative financial mechanisms in the evolving landscape of digital currencies.
