New Hampshire’s Executive Council voted 3-2 to reject a proposed $100 million Bitcoin-backed municipal bond, preventing what would have been the first state-authorized issuance of its kind.

The decision comes despite the bond receiving a provisional Ba2 credit rating from Moody’s earlier this year.

The decision came months after the state’s Business Finance Authority (BFA) approved the groundbreaking bond structure, which aimed to bring Bitcoin-backed financing to the municipal bond market.

The proposed financing, developed by Wave Digital Assets in partnership with Rosemawr Management and the BFA, would have seen the BFA issue taxable municipal bonds backed by $175 million in Bitcoin collateral provided by CleanSpark, with BitGo Trust acting as custodian.

If Bitcoin’s value dropped below $140 million, the collateral would have been liquidated to ensure bondholders were repaid in full, without exposing taxpayers to losses.

Council members said the proposal failed to demonstrate meaningful benefits for New Hampshire and raised concerns about lending state legitimacy to a transaction tied to a highly volatile asset class.

Meanwhile, backers argued that the decision was a missed opportunity and urged officials to revisit the proposal.

“It was an extremely short-sighted decision,” New Hampshire House Majority Floor Leader Keith Ammon, who has long championed crypto initiatives in the state, said in a post on X. “They should gather all relevant facts and information and reconsider their vote at a future meeting.”