On Wednesday, the New Hampshire Executive Council voted against the authorization of a $100 million bond backed by Bitcoin, effectively halting a proposal presented by state officials as a pioneering initiative aimed at attracting digital finance to the Granite State.
The vote concluded with a 3-2 decision against the proposal, as reported by The Boston Globe.
The initiative, championed by the New Hampshire Business Finance Authority in collaboration with Governor Kelly Ayotte, was characterized as “groundbreaking” and “historic.” If approved, it would have become the world’s first Bitcoin-backed municipal bond, having already secured approval from Moody’s ratings prior to its consideration by the Executive Council.
However, the councilors met the proposal with skepticism. Karen Liot Hill, the sole Democrat on the council, articulated her opposition as a matter of prudence rather than animosity.
In her remarks to The Boston Globe, she stated, “I’m not opposed to Bitcoin or cryptocurrency in general; however, I believe we are being asked to lend legitimacy to a financial transaction involving an asset class that has demonstrated significant volatility.”
Bitcoin has ’emerged’
In response, James Key-Wallace, executive director of the Business Finance Authority, contested the characterization of Bitcoin as an “emerging” asset class. “The only quibble I would have is… I wouldn’t call them ’emerging.’ They’ve ’emerged.’ They’re here,” he asserted.
Key-Wallace emphasized that the proposed bond presented no financial risk to New Hampshire taxpayers. The agreement suggested a conduit between private investors and a private borrower, with cryptocurrency serving as collateral. Should Bitcoin experience a downturn, the state would be insulated from any financial obligations. Conversely, if Bitcoin values rise over the three-year term, the authority could potentially generate millions in fees to support small business, child care, housing, and economic development initiatives. He noted that this could pave the way for “several more” similar opportunities.
Governor Ayotte, who in the previous year enacted a law allowing the state treasurer the discretion to invest in Bitcoin, which positioned New Hampshire as the first state to establish a strategic Bitcoin reserve, defended the importance of pioneering such initiatives.
She remarked, “I believe it is essential to consider this, as our state thrives on innovation—especially when it can be pursued in a manner that safeguards the interests of taxpayers.”
Liot Hill proposed tabling the measure; however, her motion did not receive a second, resulting in the proposal proceeding to a final vote. Councilors Janet Stevens and David Wheeler joined her in opposition, while Joseph Kenney and John Stephen voted in favor.
Key-Wallace expressed continued enthusiasm regarding the state’s engagement in the digital asset economy and offered to revisit the concept with the council in the future.
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