A first-of-its-kind municipal bond backed by bitcoin moves closer to issuance after receiving a sub-investment-grade rating from Moody’s Investors Service, marking a major step in the convergence between digital assets and traditional public finance.
The proposed $100 million issue, structured by the New Hampshire Business Finance Authority (BFA), earned a Ba2 rating — two notches below investment grade, according to Bloomberg reporting.
If completed, the deal would represent the first municipal bond backed by bitcoin, opening a potential new avenue for institutional capital to access the asset class through regulated fixed income markets.
Under the proposed structure, bond payments would be funded through proceeds generated from bitcoin collateral issued by borrower CleanSpark. Investors will also have upside exposure with additional payments tied to bitcoin price appreciation.
At the same time, downside protections are built into the trade. If bitcoin’s price falls below a predefined threshold, the trust can be liquidated to repay the bondholders in full.
It is critical that the bonds do not have the support of taxpayers.
“No public funds of the State of New Hampshire or any political subdivision thereof may be used to pay amounts below the rated bonds,” Moody’s noted in its report, stressing that the issuer has no taxing authority to cover any shortfalls.
Key players behind the bitcoin deal
Digital asset firm Wave Digital Assets will oversee the transaction administration, while BitGo will act as the depository for the bitcoin security, securing it in regulated cold storage.
The structure was originally approved by the BFA board back in November 2025, positioning New Hampshire as a potential leader in integrating bitcoin into public finance markets.
Gov. Kelly Ayotte backed the initiative at the time, framing it as a way to attract investment without putting taxpayers at risk.
“This is an innovative way to bring more investment opportunities to our state and position us as a leader in digital finance,” Ayotte said.
Volatility remains a significant risk
The Ba2 rating underlines the core tension at the core of the product: combining one of the most volatile asset classes with one of the traditionally safest.
Bitcoin is down nearly 50% from its October 2025 peak near $126,000, highlighting the risks associated with fluctuations in security value. During the same period, high-yield municipal bond indices produced modestly positive returns, illustrating the contrast between the two asset classes.
Still, proponents argue that the structure’s collateral model — and liquidation guarantees — could make bitcoin viable in conservative capital markets.
The deal is part of a broader effort by Wave and its partners to create a bridge between digital assets and traditional debt markets, enabling bitcoin to act as institutional security.
If successful, the issuance could establish a template for future crypto-backed municipal or corporate debt offerings, effectively creating a new hybrid asset class.
“This is not just one transaction – it is the opening of a new debt market,” Wave co-founder Les Borsai said when the structure was first revealed.
For now, the bond has no confirmed pricing date. But with a rating in place, the experiment of merging bitcoin with municipal finance is entering a more concrete phase, one that could test whether traditional investors are ready to take on crypto risk in exchange for returns and upside exposure.