New Hampshire has rejected a plan to issue $100 million of bitcoin-backed bonds.

Bitcoin Magazine and The Boston Globe reported on July 9 that the New Hampshire Executive Council put the proposal to a vote and it failed 3-2.

The plan has been promoted by the New Hampshire Business Finance Authority and Governor Kelly Ayotte (켈리 아요트) as part of a strategy to attract digital finance. If it had been issued, it was set to become the world’s first bitcoin-backed municipal bond. It advanced to an Executive Council vote, the final step before issuance, after clearing a Moody’s credit-rating process, but it did not pass.

The key issues were cryptocurrency volatility and the symbolic legitimacy the state government would confer on such transactions. Council member Karen Liot Hill (캐런 리엇 힐), who voted against it, drew a line by saying she is not opposed to bitcoin or cryptocurrencies in general. She said it could amount to the state government legitimising a financial transaction linked to a new and highly volatile asset class.

James Key-Wallace (제임스 키-월리스), secretary at the New Hampshire Business Finance Authority who led the initiative, countered that bitcoin can no longer be seen as an emerging asset. He argued bitcoin is already established.

The New Hampshire Business Finance Authority has stressed that the structure does not shift risk to taxpayers. It described the loan agreement as a channel connecting private investors and private borrowers, with bitcoin provided as collateral. The plan was designed so the state government would not have a repayment obligation even if bitcoin prices plunge. If bitcoin prices rise over the 3-year maturity, the agency would secure fee income to use for small and medium-sized businesses, childcare, housing and economic development programmes.

Ayotte also argued for the need for the plan, citing a first-mover effect. She said the state can keep growing when it continues to innovate and that it should consider it more actively, especially if it protects taxpayers.

Differences were clear during the voting process. Liot Hill proposed holding the item, but did not win support, and it moved to a final vote. Janet Stevens (재닛 스티븐스) and David Wheeler (데이비드 휠러) joined the opposition, while Joseph Kenney (조지프 케니) and John Stephen (존 스티븐) voted in favour.

The rejection differed from New Hampshire’s recent pro-bitcoin moves. Ayotte last year signed a bill giving the state treasurer discretion to invest in bitcoin, and New Hampshire became the first state to pass legislation related to a strategic bitcoin reserve. Still, at the stage of issuing an actual financial product, the council appeared to view price volatility and the role of public institutions more sensitively.

The New Hampshire Business Finance Authority did not rule out follow-up talks. Key-Wallace said he still has expectations for New Hampshire’s role in the digital asset economy and that he could present the idea to the council again. The decision raised the likelihood that bitcoin-linked fundraising efforts by U.S. local governments will be reviewed again for the time being, amid competing arguments for caution and innovation.