The New Hampshire Business Finance Authority (BFA) plans to issue taxable revenue bonds under the Waverose Finance Project. Moody’s Investors Service has assigned a provisional Ba2 rating to these bonds, two notches below investment grade. The rating reflects both the bold innovation and the inherent risks tied to Bitcoin’s volatility. An Innovative and Protected Structure Unlike traditional municipal bonds, which are often backed by taxpayer revenues, these bonds are collateralized by Bitcoin. The structure is designed as a conduit issuer: the State of New Hampshire acts primarily as an intermediary and does not put public funds at risk.
The Bitcoin serving as collateral will be held in secure cold storage by BitGo Trust, one of the leading institutional cryptocurrency custodians. Borrowers (companies in the digital asset sector) will be required to provide over-collateralization of approximately 160% of the loan value in Bitcoin. An automatic liquidation mechanism is in place if the collateral value falls below a critical threshold (around 130-140% depending on the tranche), with an early repayment trigger at 1.40x loan-to-value (LTV).
The bonds, divided into two series maturing in 2029, offer investors a fixed yield while providing indirect exposure to Bitcoin’s performance, without the State bearing downside risk. A Major Test for Bitcoin as Collateral in Traditional Finance This initiative represents a concrete test of using Bitcoin as collateral in traditional debt markets. Until now, Bitcoin has largely been viewed as a speculative asset or a store of value. Here, it is formally entering the conservative world of municipal bonds. Moody’s Ba2 rating is particularly significant: it acknowledges the robustness of the structure (over-collateralization, institutional custody, and strong protective mechanisms) while highlighting the risks associated with Bitcoin’s price volatility and the still-nascent nature of this type of financial product. For crypto-sector companies, this operation could provide access to lower-cost financing through the municipal bond market while allowing them to keep their Bitcoin on their balance sheets without selling it. New Hampshire, a Crypto-Friendly Pioneer This development fits into the State of New Hampshire’s broader strategy of positioning itself as one of the most crypto-friendly states in the U.S. In May 2025, it had already passed a law authorizing a strategic reserve in Bitcoin and precious metals. The initial approval for this bond issuance dates back to November 2025 by the BFA board. Prominent law firms such as Orrick assisted with the legal structuring, while entities like Wave Digital Assets and Rosemawr Management are involved in the project. Outlook and Implications If the issuance proceeds (no final date has been announced yet), it could pave the way for other states or municipalities to integrate digital assets into their financing toolkit. It also raises fundamental questions:
Can Bitcoin become an acceptable “bankable” collateral in the eyes of regulators and institutional investors? How will credit rating agencies evolve as crypto markets mature? What impact will this have on the attractiveness of pro-Bitcoin states for crypto companies?
For now, the operation remains modest in size ($100 million), but it constitutes a powerful symbolic precedent. Bitcoin would no longer be just an asset one holds — it would become an asset that can be used as collateral in traditional finance. The State of New Hampshire, known for its libertarian spirit and motto “Live Free or Die,” may have found a new way to combine financial freedom with innovation.