Early adopter of tokenized money market fund collateral adds USDM1, the world’s first natively issued secured sovereign bond, as collateral across derivatives, financing and institutional trading
NEW YORK, Sept. 9, 2026 /PRNewswire/ — Nonco, an institutional digital asset firm with businesses spanning derivatives, lending, OTC liquidity, market making and institutional execution, today announced that it will accept USDM1 as collateral from eligible counterparties and post USDM1 across its derivatives, financing and institutional trading activities.
The adoption marks the latest expansion of Nonco’s institutional collateral toolkit. The firm, which has surpassed $100 billion in bilateral OTC trading volume and onboarded more than 900 institutional counterparties, was an early participant in the use of tokenized money market fund shares as collateral in live derivatives transactions, including the use of Superstate’s USTB in a bilateral BTC/USD options trade.
Where payment stablecoins are generally structured as corporate obligations and tokenized money market funds represent interests in investment funds, USDM1 is a natively issued, secured sovereign bond – with different legal rights, economic characteristics and applications across 24/7 institutional markets.
USDM1 is a USD-denominated sovereign bond secured on a 1:1 basis by short-dated US Treasuries pledged to a US trust company in a bankruptcy-remote structure. Its issuance, collateral and redemption arrangements are governed by New York law, with an explicit customary waiver of sovereign immunity. As a dual-recourse instrument, holders maintain enforceable rights to par redemption against a sovereign issuer and a first-priority perfected security interest in Treasury collateral under Articles 8 and 9 of the Uniform Commercial Code. Cleary Gottlieb Steen & Hamilton LLP advised as issuer’s counsel. M1X Global serves as coordinating agent.
Sovereign securities have long served as foundational collateral assets across global institutional financing markets, with roles spanning derivatives margin, repo, secured financing and liquidity management. USDM1 pays a sovereign coupon and, when unencumbered, has been structured to support look-through to HQLA[1] with 24/7, T+0 settlement. It is compatible with industry-standard ISDA, GMRA and GMSLA documentation, benefiting from robust US close-out netting protections.
For institutional trading firms, the legal and financial characteristics of collateral can directly affect financing flexibility, counterparty exposure, liquidity management and the amount of balance sheet capacity required to support trading activity.
“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. Institutional markets have always optimized among different forms of high-quality collateral depending on the transaction. As markets move onchain, the same principle applies.”
“Tokenization is a technology, not an asset class,” said Jordan Goldman, President and COO of M1X Global, the coordinating agent for USDM1. “A payment stablecoin, a fund share and a sovereign bond can all move onchain, but they remain fundamentally different financial instruments. Two assets with the same dollar value can have very different collateral economics depending on their legal rights, eligibility, netting treatment and financing characteristics.”
Institutional custody and settlement infrastructure supporting USDM1 includes Anchorage Digital Bank, BitGo Bank & Trust, N.A., and tZERO’s regulated broker-dealer custodian. USDM1 is also offered through Tradeweb and accepted by FDIC-insured Bank of Guam.
Most recently, USDM1 served as the sovereign securities collateral leg in the first fully onchain repo transaction with Virtu Financial through Tradeweb, demonstrating its use within established institutional financing frameworks.
About Nonco
Nonco is a digital asset firm purpose-built for institutions. They provide institutional-grade liquidity with bespoke execution and 24/7/365 counterparty support. Trusted by some of the most sophisticated players in the market, they deliver reliability, precision, and scale at the intersection of digital assets and traditional finance. Backed by leading investors including VanEck, Hack VC, Morgan Creek, and Valor Capital, Nonco combines deep market expertise with world-class infrastructure to serve the next generation of institutional finance.
About USDM1
USDM1 is a fully collateralized, USD-denominated sovereign bond natively issued onchain by the Republic of the Marshall Islands. It is structured in the style of a Brady bond under New York law, with an explicit customary waiver of sovereign immunity, and secured on a 1:1 basis by short-duration US Treasury instruments pledged to a US trust company in a bankruptcy-remote structure.
The Republic of the Marshall Islands operates exclusively on the US dollar standard under its Compact of Free Association with the United States. As a dollar-denominated sovereign obligation, USDM1 does not carry foreign-exchange or convertibility risk. Holders maintain enforceable rights to par redemption against a sovereign issuer and a perfected, first-priority security interest in Treasury collateral under UCC 8/9. For more, see https://usdm1.com
USDM1 is compatible with ISDA, GMRA and GMSLA agreements for derivatives, repo and securities lending, and is eligible for robust US close-out netting protections. Cleary Gottlieb Steen & Hamilton LLP serves as issuer’s counsel and advised with respect to the structuring of the instrument under New York law, with the participation of partners specializing in sovereign debt, UCC and secured transactions, creditors’ rights, netting and digital asset markets.
About M1X Global
M1X Global is a sovereign financial infrastructure and technology company bridging public finance and onchain capital markets. Operating in public-private partnership with the Republic of the Marshall Islands, M1X Global coordinates the legal, compliance, technology, custody and institutional infrastructure behind sovereign digital instruments.
Disclaimer
The content of this communication is for informational purposes only and is not intended to market, offer, or solicit you to buy or sell USDM1 or any financial product directly from Nonco, the Republic of the Marshall Islands, M1X Global or otherwise.
USDM1 is being offered and sold solely outside the United States in reliance on Regulation S under the United States Securities Act of 1933, as amended (the “Securities Act”). The Republic of the Marshall Islands has not registered any offering of USDM1 under the US Securities Act, or any other US federal and state securities laws. Accordingly, USDM1 may not be offered, sold, pledged or otherwise transferred in the United States or to, or for the account or benefit of, US Persons (as defined in Regulation S), unless they are registered, or exempt from, or not subject to, registration under the Securities Act.
Nothing in this communication constitutes, or should be construed as, a recommendation by Nonco, the Republic of the Marshall Islands, M1X Global or any third party to acquire or dispose of USDM1 or any other security, or to engage in any investment strategy or transaction.
Prospective investors are urged to carefully read the offering memorandum prepared in connection with the offering of USDM1 in its entirety, including all annexes, appendices, and supplements thereto, before making any investment decision. The offering memorandum contains important information regarding, among other things, the terms of the securities, the risks associated with an investment therein, and the financial condition and business of the issuer. Prospective investors are solely responsible for determining whether any investment, security or strategy, or any other product or service, is appropriate or suitable for them based on their investment objectives and personal and financial situation. Prospective investors should consult an attorney or tax professional regarding their specific legal or tax situation.
Forward-Looking Statements
This communication may contain forward-looking statements. These statements are statements that are not historical facts. The words “anticipates”, “believes”, “estimates”, “expects”, “plans” and similar expressions are intended to identify forward-looking statements. Statements regarding trends relating to the Republic of the Marshall Islands or USDM1, and future expansions or projects relating to Republic of the Marshall Islands or USDM1 are examples of forward-looking statements. Such statements reflect the current views of the Republic of the Marshall Islands and are subject to a number of risks and uncertainties. There is no guarantee that the expected events, trends or results will actually occur. The statements are based on many assumptions and factors, including general economic and market conditions, industry conditions, and operating factors. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations.
Footnotes
HQLA1 classification is subject to the applicable regulations and regulatory determinations of each financial institution’s prudential supervisor. Each institution is responsible for its own regulatory capital and liquidity analysis.
[1] HQLA classification is subject to the applicable regulations and regulatory determinations of each financial institution’s prudential supervisor. Each institution is responsible for its own regulatory capital and liquidity analysis. M1X Global
SOURCE USDM1
