New Hampshire Says No to World's First Bitcoin-Backed Bond

A group of New Hampshire officials just rejected a plan that would have made history. On Wednesday, the state's Executive Council (a small group of elected officials who oversee big state decisions) voted 3 to 2 against a $100 million bond backed by Bitcoin.

So what exactly was being proposed? A bond is basically a way of borrowing money — investors lend money now and get paid back later with interest. This particular bond would have been backed by Bitcoin, meaning the cryptocurrency was used as collateral (something valuable pledged as a guarantee in case the loan isn't repaid).

Had it passed, it would have been the world's first Bitcoin-backed municipal bond (a bond issued by a local government). Supporters, including the state's Governor Kelly Ayotte, called it "groundbreaking" and "historic."

Key facts about the deal:

• Total value: $100 million
• Vote result: 3-2 against
• Term length: 3 years
• Risk to taxpayers: officials said it was zero

The person leading the plan, James Key-Wallace, explained that the state itself would owe nothing — even if Bitcoin's price crashed. The arrangement simply connected private investors with a private borrower, using Bitcoin as the safety net. If Bitcoin rose in value, the state could have earned millions in fees to fund small business, child care, and housing programs.

But not everyone was convinced. Councilor Karen Liot Hill said she wasn't against Bitcoin, but worried the state would be lending "legitimacy" to a volatile asset (something whose price jumps up and down sharply and unpredictably). She and two colleagues voted no.

New Hampshire has actually been a leader in crypto before. Last year it became the first state to pass a strategic Bitcoin reserve into law, allowing its treasurer to invest in Bitcoin.

The bottom line: Even though the plan cleared major hurdles — including a credit rating from Moody's — it fell at the final step. Officials say they remain excited about crypto and may bring the idea back in the future.

This is an AI-generated summary. Read the original article at: https://bitcoinmagazine.com/news/new-hampshire-council-rejects-100-million