A groundbreaking municipal bond that is supported by bitcoin is progressing towards issuance after receiving a sub-investment-grade rating from Moody’s Investors Service. This development signifies a significant advancement in the integration of digital assets with conventional public finance.
The proposed issuance, amounting to $100 million and organized by the New Hampshire Business Finance Authority (BFA), has been assigned a Ba2 rating, which is two levels below investment grade, as reported by Bloomberg.
If this deal goes through, it will mark the first instance of a municipal bond being backed by bitcoin collateral. This could pave the way for institutional investors to access this asset class via regulated fixed-income markets.
According to the proposed framework, payments on the bonds will be funded through revenues generated from bitcoin collateral provided by CleanSpark. Additionally, investors will benefit from potential gains linked to increases in bitcoin prices.
Moreover, there are built-in protections against downside risks within this arrangement. Should bitcoin’s value drop below an established threshold, provisions allow for liquidation of trust assets to ensure full repayment to bondholders.
Importantly, these bonds do not have any taxpayer backing whatsoever.
Moody’s highlighted in its report that “No public funds of the State of New Hampshire or any political subdivision thereof may be used to pay amounts under the rated bonds,” stressing that there is no taxing authority available for covering any potential shortfalls associated with these bonds.
Main Participants Involved in The Bitcoin Initiative
The transaction management will be handled by Wave Digital Assets while BitGo has been appointed as custodian for securing bitcoin collateral in regulated cold storage facilities.
This structure received initial approval from BFA’s board back in November 2025 and positions New Hampshire as a frontrunner in merging bitcoin into public finance sectors.
At that time, Governor Kelly Ayotte expressed her support for this initiative as a means of attracting investments without putting taxpayers at risk.
“This represents an innovative approach toward enhancing investment opportunities within our state and establishing us as leaders in digital finance,” Ayotte remarked during her endorsement of the project.
<h2.Volatility Continues To Be A Major Concern
The Ba2 rating reflects an inherent tension present within this financial product: combining one of today’s most volatile asset classes with traditionally stable ones.
Bitcoin has seen nearly a 50% decline since reaching its peak near $126K back in October 2025; such fluctuations highlight risks associated with variations in collateral value. Conversely high-yield municipal bond indices have shown modest positive returns during similar periods illustrating stark contrasts between both asset classes.
Nevertheless proponents maintain that safeguards related specifically around liquidation processes alongside their model based on collateralization could render Bitcoin suitable even amidst conservative capital markets.
This deal forms part of broader initiatives undertaken jointly between Wave Digital Assets along other partners aiming create pathways bridging gaps existing between traditional debt markets & emerging digital assets allowing cryptocurrencies like Bitcoin serve effectively functioning institutional-grade collaterals.
If successful issuance may set precedent future crypto-backed offerings whether they’re municipal corporate debts thus birthing entirely new hybridized categories investments altogether!
“This isn’t merely about one transaction—it signifies opening doors into fresh avenues within debt market landscapes,” stated Les Borsai co-founder Wave when unveiling structure initially!
This post titled “New Hampshire’s Bitcoin-Backed Municipal Bond Moves Closer With Moody’s Rating” was originally published on Bitcoin Magazine authored Micah Zimmerman!