Key facts
- Virtu Financial, M1X Global, and Tradeweb completed an onchain repo transaction.
- The transaction used the USDM1, a US dollar-denominated sovereign bond issued by the Republic of the Marshall Islands, as collateral.
- The USDM1 bond is backed 1:1 by short-term US Treasurys and pays a coupon.
- The entire repo and repurchase cycle settled on the Canton Network in under 10 minutes.
- This is reportedly the first repo to combine natively issued sovereign collateral with fully onchain atomic settlement.
Virtu Financial, M1X Global, and Tradeweb have successfully executed an onchain repo transaction utilizing a sovereign digital bond as collateral. The transaction involved USDM1, a US dollar-denominated bond issued by the Republic of the Marshall Islands, which is backed 1:1 by short-term US Treasurys and pays a coupon.
The full repo and repurchase cycle was completed in under 10 minutes on the Canton Network, a blockchain designed for institutional finance with privacy and permissioning features. This transaction is notable as it represents the first repo to combine natively issued sovereign collateral with fully onchain atomic settlement.
The USDM1 bond is available through Tradeweb, with institutional custody provided by Anchorage Digital, BitGo, and tZERO. The use of tokenized sovereign debt as collateral in an institutional financing transaction, rather than solely for issuance or trading, is an early-stage development that may or may not see broader adoption in institutional repo markets.
The Canton Network has seen increased institutional activity, including a previous transaction where Tradeweb facilitated the transfer of a tokenized US Treasury from Franklin Templeton to Virtu Financial. Other recent developments on the network include the launch of a cross-chain swap engine and a USD1 stablecoin.