New Hampshire’s Executive Council on July 8 cast a 3-2 vote to block a $100 million municipal bond that would have been secured by Bitcoin, ending a program promoted by Governor Kelly Ayotte and finance officials as the first initiative of its kind in the country.
The vote halted the approach that the New Hampshire Business Finance Authority (BFA) spent months developing after the board approved a $100 million first issue last November. However, the deal had always required the approval of the Governor and the Executive Council. According to the Boston Globe, Councilor Karen Liot Hill made a motion to table the motion at the meeting on Wednesday, and since no one supported her, it went to a vote to decide what to do.
Liot Hill, the only Democrat in the Council, joined the Republicans Janet Stevens and David Wheeler to vote against the proposal while Joseph Kenney and John Stephen voted pro.
What the bond would have done
The transaction was arranged in such a way that the state bore no repayment risk. According to reports, the BFA would issue taxable conduit revenue bonds, which would be used to transfer money from a private investor to private borrowers with Bitcoin pledged as collateral. The state of New Hampshire was not liable for any debt.
The borrower reportedly would have to hand over Bitcoin valued at 160% of the amount received from the bond issue to BitGo Trust Company, a regulated custodian firm. The report also highlighted that the loan would automatically be sold off if its value fell to 140% of the revenue bonds, thereby redeeming the debt early to protect investors. The bond had a three-year term with repayment scheduled for 2029.
The deal was structured by Wave Digital Assets and Rosemawr Management with the help of BFA and law firm Orrick acting as the advisor. Moody’s assigned a provisional rating of Ba2, of speculative nature, for up to $100 million in taxable revenue bonds related to the initiative, which was linked to a loan to a Bitcoin-collateralized borrower trust.
The authority could receive millions in fees in case of any Bitcoin price increase throughout the duration of the deal. As explained by James Key-Wallace, the Executive Director of BFA, the funds would be used as a seed fund for small businesses, child care, housing, and economic development in the state, and the deal could become a good launch of “several more” deals.
Why the council balked
Council members who opposed the resolution displayed their cautious attitude instead of outright denial. “I’m not opposed to Bitcoin or crypto in general,” said Liot Hill when asked to comment by the Boston Globe. Her concern was that the state would “lend a kind of legitimacy to a financial transaction” involving what she calls a very volatile and still emerging industry.
Key-Wallace rebutted the framing made in the meeting. He explained that Bitcoin has “emerged” and has “been around for a while”. Liot Hill, however, was of a different opinion and stated that being true innovation brings risks along with it because it has not been around long enough for people to decide about it.
Ayotte, who passed a bill last year allowing the state treasurer to have discretionary powers to invest in Bitcoin, defended her choice for New Hampshire to lead the way in embracing new technology. She said that New Hampshire “continues to thrive when we are continuing to be innovative,” adding that this should be done without risking public funds.
New Hampshire is once again First in the Nation! 🎉
Just signed a new law allowing our state to invest in cryptocurrency and precious metals. pic.twitter.com/ua9bawZKbM
— Governor Kelly Ayotte (@KellyAyotte) May 6, 2025
The results demonstrate how much a rated and well-planned crypto transaction can go before being stopped at the decision-making level. The credit issues regarding the way Bitcoin is evaluated, priced, and liquidated were resolved in theory according to the Moody’s assessment. However, the council’s inquiry dealt with a completely different problem: whether public authorities are willing to associate the state name with Bitcoin collateral at all, even taking into account the fact that its supporters claim that no harm would be done to the taxpayers.
The notion is anything but gone. On July 9, Key-Wallace stated in an email that his group had received “lots of support” at the council meeting and agrees that taking time to consider it is “a fair response.” He repeated his commitment to consider the council’s concerns and would present the proposal again.
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