New Hampshire is set to pioneer the nation”s first issuance of a $100 million bitcoin bond, a move that aims to integrate cryptocurrency into state financing. This initiative, supported by the New Hampshire Business Finance Authority (NHBFA), involves a collaboration with a private sector firm to manage the bond, according to recent reports.
The NHBFA authorized the issuance of these bonds specifically for the project aimed at acquiring and holding digital currency. While the NHBFA typically does not oversee state-backed bonds directly, it plays a crucial role in facilitating private sector entities to handle them. Following the establishment of a deal, the New Hampshire Executive Council will evaluate the arrangement and vote for final approval, which will allow the project to commence.
James Key-Wallace, the NHBFA”s executive director, expressed pride in contributing to the development of innovative financial tools that enable companies within the digital asset ecosystem to secure capital efficiently and safely. He emphasized that this initiative poses no risk to taxpayers or state guarantees.
The NHBFA operates as a self-funded entity aimed at enhancing economic growth within New Hampshire. Proceeds from the bond projects are reinvested back into the organization, which Key-Wallace indicated would help establish a unique crypto-backed economic development fund. The investment advisory for this bond initiative is being provided by Wave Digital Assets, in partnership with Rosemawr Management, while BitGo is responsible for the custody of the collateral.
State Representative Keith Ammon, known for his advocacy for cryptocurrency policies in the state, noted that this first bitcoin bond effort could serve as a model for future initiatives. He highlighted the potential of bitcoin to help mitigate the impact of inflation on the state”s economy. “This is like training wheels to get to that point, protecting our state”s finances from future devaluation of the dollar,” Ammon stated in a recent interview.
The proposed bond is set for a two-year duration and its success will depend on the appreciation of bitcoin”s value. Currently, the cryptocurrency has seen a decline of about 6% over the past year, following a period of steady growth prior to a sharp downturn last month.
New Hampshire has been proactive in adopting cryptocurrency policies, recently becoming the first state to establish a crypto reserve, moving ahead of federal government initiatives that are still in the planning phases.
This innovative step may not only set a precedent for other states but also highlight the growing acceptance of cryptocurrency in mainstream finance.
