New York – September 15, 2026 -- Nonco, an institutional digital asset firm with over $100 billion in bilateral OTC trading volume, will accept USDM1, described as the world's first natively issued secured sovereign bond, as collateral across its derivatives, financing and institutional trading operations.
Nonco expands collateral toolkit beyond tokenized money market funds to sovereign debt
The firm, which counts more than 900 institutional counterparties, previously used Superstate's USTB tokenized money market fund shares as collateral in a bilateral BTC/USD options trade. USDM1 marks its move into natively issued sovereign debt as collateral, distinct from payment stablecoins structured as corporate obligations or tokenized fund interests.
USDM1 carries dual-recourse legal structure secured 1:1 by short-dated US Treasuries
Issued by the Republic of the Marshall Islands under New York law in the style of a Brady bond, USDM1 is secured on a 1:1 basis by short-duration US Treasury instruments pledged to a US trust company in a bankruptcy-remote structure. Holders retain enforceable rights to par redemption against the sovereign issuer plus a first-priority perfected security interest in the Treasury collateral under Articles 8 and 9 of the Uniform Commercial Code. The bond carries an explicit customary waiver of sovereign immunity and is compatible with ISDA, GMRA and GMSLA documentation, qualifying for US close-out netting protections.
Instrument settles T+0 around the clock and has been structured for HQLA look-through treatment
USDM1 pays a sovereign coupon and settles on a 24/7, T+0 basis. When unencumbered, it has been structured to support look-through treatment as high-quality liquid assets, subject to each institution's own regulatory determination. Cleary Gottlieb Steen & Hamilton LLP advised as issuer's counsel; M1X Global serves as coordinating agent.
Custody network spans Anchorage, BitGo and tZERO, with Virtu Financial completing first onchain repo trade
Institutional custody and settlement infrastructure for USDM1 includes Anchorage Digital Bank, BitGo Bank & Trust, N.A., and tZERO's regulated broker-dealer custodian. The instrument is also offered through Tradeweb and accepted by FDIC-insured Bank of Guam. USDM1 most recently served as the sovereign securities collateral leg in the first fully onchain repo transaction with Virtu Financial, executed through Tradeweb.
"Nonco was early in demonstrating that tokenized fund interests could become productive collateral rather than simply investment products," said Jeffrey Howard, Head of North America and Partner of Nonco. "Natively issued sovereign debt adds another important building block to our toolkit."
Jordan Goldman, President and COO of M1X Global, said tokenization is a technology rather than an asset class, noting that payment stablecoins, fund shares and sovereign bonds carry distinct collateral economics despite moving onchain under equivalent dollar values.