Virtu Financial, M1X Global and Tradeweb completed an onchain repo transaction using USDM1, a digital sovereign bond issued by the Republic of the Marshall Islands, as collateral. The full transaction settled on Canton Network, and the entire repo and repurchase cycle finished in under 10 minutes.
USDM1 used as collateral in a fully onchain repo
The collateral in the trade was USDM1, a US dollar-denominated sovereign bond issued onchain by the Republic of the Marshall Islands and backed 1:1 by short-term US Treasurys. The bond pays a coupon while it is being used as collateral and is structured under New York law as a fully collateralized sovereign obligation.
The companies said the deal was the first repo to combine natively issued sovereign collateral with fully onchain atomic settlement. The transaction was executed between regulated counterparties on Tradeweb, with the complete repo and repurchase cycle wrapped up in less than 10 minutes.
The transaction puts tokenized sovereign debt to work as collateral in an institutional financing transaction, rather than limiting it to issuance or trading. The report also notes that this remains an early-stage example, and it is still unclear whether the model will gain broader use across institutional repo markets.
Tradeweb distribution and institutional custody
According to the release, USDM1 is available through the electronic trading platform Tradeweb. Institutional custody is provided by Anchorage Digital, BitGo and tZERO.
Canton Network logs more institutional activity
Canton is a blockchain network built for institutional finance, with privacy and permissioning features aimed at regulated transactions and tokenized assets.
Thursday’s repo followed a July transaction in which Tradeweb facilitated the real-time transfer of a tokenized US Treasury from Franklin Templeton to Virtu Financial on Canton, with the trade settling against USDCx.
Activity on the network picked up in August. FalconX and Interstice launched a crosschain swap engine linking Canton with Ethereum, Solana and Robinhood Chain. World Liberty Financial also launched its USD1 stablecoin natively on Canton.
This month, Digital Asset and the American Idea Foundation announced plans for a 2027 pilot that would use Canton to distribute state-administered benefits across three US states. The American Idea Foundation was founded by former US House Speaker Paul Ryan.