Virtu Financial, M1X Global and Tradeweb Complete First Fully Onchain Repo Using Sovereign Digital Bond | LeapRate
Virtu Financial, M1X Global and Tradeweb announced on August 27 the completion of what they describe as the first fully onchain repo transaction in which the securities leg was a sovereign digital bond. The trade was executed on the Canton network, with securities delivery, the cash leg and the return all settling atomically onchain.
The repo was carried out bilaterally on the Tradeweb platform between regulated institutional counterparties, without prime broker intermediation. The firms said the full cycle, from execution to repurchase, was completed in under 10 minutes, a timeframe not achievable under conventional T+1 settlement systems.
The collateral used, USDM1, is a sovereign bond issued natively onchain by the Republic of the Marshall Islands. Structured under New York law in the style of a fully collateralized Brady bond, it is backed 1:1 by short-dated US Treasuries held in bankruptcy-remote custody.
The bond is classified as a UCC Article 8 investment security and is eligible for inclusion in ISDA and GMRA close-out netting sets. It is available through Tradeweb, with institutional custody provided by Anchorage, BitGo and tZERO, and support from Bank of Guam.
Executives from the three firms said the transaction demonstrates how digitally native sovereign collateral combined with atomic settlement could improve capital efficiency and modernize repo market infrastructure while meeting institutional standards. USDM1 was structured with advice from Cleary Gottlieb as issuer’s counsel.
