The concept of securing loans and mortgages with digital currency is not totally new. However, the State of New Hampshire’s Business Finance Authority (BFA) is taking this approach to a new level. In November 2025 the BFA approved the first ever $100 million municipal bond collateralized with Bitcoin. Bitminers and companies with bitcoin treasuries may have a new option for seeking to obtain lower cost, muni-bond, private company financing – the New Hampshire Bitcoin-backed conduit bond.
Traditional private activity bonds structured as local government debt often take the form of “industrial revenue bonds” or “IRBs.” With this vehicle, the state or municipality floats a bond typically purchased by institutional investors that is repaid from, and secured by, the private company’s revenues (with no recourse to the issuing state or local government). Traditionally, IRBs are project-based financings, meaning the funding is tied to fixed capital expenditures to construct a facility (e.g. a power plant, school, or hospital) or purchase heavy equipment or the like with a local economic benefit.
The details of the structure and documentation of the BFA’s Bitcoin-bond program are unclear at this time. However, it is reported that this bond is structured as a conduit – borrowers would secure their obligations with approximately 160% of their bond’s value in Bitcoin. If the bitcoin-based collateral falls below 130% of the bond’s value (i.e. Bitcoin value drops more than 18.75%), the position will be liquidated to protect the lender-investors.
The bond is not backed by the state or taxpayers. The BFA, however, acts as a facilitator, approving and overseeing the transaction. Repayment exposure is limited to the Bitcoin collateral held by the third-party trustee.
In addition to paying lower interest rate costs (from the lower tax-favored muni rate of the conduit bond), borrowers can use their Bitcoin as collateral for needed funds rather than selling their Bitcoin to generate cash and paying taxes on the sale.
On the other hand, it is reported that the fees from the Bitcoin-backed bond transactions and any appreciation in the Bitcoin collateral would go to New Hampshire’s Bitcoin Economic Development Fund.
To date, there have been no reports of potential borrowers utilizing the Bitcoin Bond. Potential borrowers should evaluate the benefits of a lower interest rate against (1) the loss of Bitcoin upside (because the BFA takes that), (2) the lost opportunity from earning yield on the Bitcoin, and (3) the “hair trigger” (by Bitcoin standards) of loan liquidation for a greater than 18.75% decline.
Bitcoin has fallen approximately 24% since the end of November 2025 and 44% from its all-time high. Any loans that had been closed near the November 2025 bond announcement date would have been liquidated. Furthermore, there have been at least 6 drawdowns of Bitcoin exceeding 60%.
The BFA is a self-funded, state organization created to foster New Hampshire’s economic development.
For questions about this Bitcoin bond or crypto law, please reach out to John Chu, Max Riffin, or Russ Hansen.