The Business Finance Authority of New Hampshire has reportedly approved a Bitcoin-backed municipal bond worth $100 million. In simple words, the government is keeping Bitcoin as collateral to protect investors. This is a new milestone that shook the evolving crypto landscape of the US.
The financial regulator of the US state of New Hampshire also allows municipal bonds to use over-collateralized Bitcoin held by BitGo, a digital asset infrastructure platform.
If the price of Bitcoin nosedives, the state cannot protect investor funds used in the bond. To avoid this situation, New Hampshire adds more Bitcoin as collateral, known as over-collateralization. This BTC is held by a custodian, such as BitGo.
For the uninitiated, a municipal bond is basically a loan taken by the government. A state, public agency, or other government bodies may need money for different programs, development initiatives, or projects. In this case, they borrow money from investors through a bond.
Investors provide the money to the government, and later they receive it back from the government with interest.
So, what is Hampshire doing with the bond?
When New Hampshire issues a bond, investors can buy it. However, the state keeps BTC as collateral to protect investors in cases where it cannot repay the money invested by investors. This move signals that New Hampshire is at the forefront of innovation and a hub for crypto-related businesses.
Now, focusing on over-collateralization, it helps the state to handle situations where it cannot repay investors. Even if the price of Bitcoin drops by 70%, over-collateralization or the extra collateral helps to fully cover the value of the bond, mitigating investor risk.
New Hampshire is already into crypto
New Hampshire’s Bitcoin-backed municipal bond is not its first leap into cryptocurrency. In May 2025, it became the first state to legally adopt Bitcoin as a strategic reserve asset. The state passed the HB 302 bill that permits the state treasurer to invest up to 5% public funds into Bitcoin.
New Hampshire’s crypto move aligns well with the goals of the US to become a country supporting blockchain initiatives. As is evident, the US President Donald Trump highly appreciates pro-crypto ventures, and New Hampshire’s bold crypto initiatives continue to find new ways to progress in the future.
