USDM1 is described as a natively issued onchain sovereign bond backed 1:1 by short-duration U.S. Treasuries, with BitGo’s addition widening custody and collateral options for institutions.
BitGo said it will provide institutional custody and T+0 off-exchange settlement for USDM1, a USD-denominated sovereign bond issued by the Republic of the Marshall Islands and used in the country’s universal basic income program. The move extends the instrument’s role beyond government disbursements into institutional collateral workflows. USDM1 is structured as a fully collateralized Brady bond under New York law, with a sovereign immunity waiver, and is backed 1:1 by short-duration U.S. Treasuries held in a bankruptcy-remote account. The bond accrues value daily, includes enforceable par redemption, and was issued directly onchain rather than wrapped from a legacy security, with the blockchain serving as the legal register of record. Launched in January 2026, USDM1 is deployed natively across Stellar, Ethereum and Solana. RWA.xyz data cited in the announcement showed about 1.25 million tokens in circulation, including roughly 1.05 million on Stellar, 207,000 on Ethereum and about 469 via Solana’s Token-2022 standard. The Republic of the Marshall Islands has used the bond since November 2025 to send $200 quarterly payments to eligible citizens across more than 1,200 islands through the Lomalo mobile app. BitGo Bank & Trust will offer segregated custody with offline key management and enable counterparties to use USDM1 as collateral through its Go Network without moving assets onto exchanges. The same-session, 24/7 settlement model is designed to reduce counterparty and commingling risk. Anchorage Digital Bank already provides custody for USDM1, and BitGo said it carries up to $250 million in insurance for assets held in regulated custody. The structure is also being positioned for potential treatment as a Level 1 High-Quality Liquid Asset under Basel III-equivalent frameworks, though no jurisdiction has confirmed that classification. RWA.xyz data showed total asset value at about $1.27 million across 465 holders, up 31.7% in 30 days, with roughly $10 million in monthly transfer volume, pointing to early but active institutional testing.