STS Digital Ltd. said it will accept USDM1 from eligible counterparties and use the instrument as collateral across its over-the-counter derivatives, structured products and financing relationships. The move brings a natively issued, USD-denominated sovereign bond on-chain into institutional collateral workflows that use standard ISDA (global derivatives contract standard), GMRA (global repo agreement) and GMSLA (global securities lending agreement) documentation. The company said USDM1 can be used as initial or variation margin within legally enforceable netting sets, potentially reducing unsecured counterparty exposure and lowering the amount of other collateral needed to support a portfolio. USDM1 is issued on-chain by the Republic of the Marshall Islands and is described as fully collateralized by short-duration U.S. Treasury instruments in a bankruptcy-remote structure. STS Digital framed the adoption as part of a broader effort to connect traditional financial infrastructure with digital-asset markets, while M1X Global said the instrument is designed to preserve 24/7 settlement benefits alongside the legal and risk-management standards institutional counterparties require.