Virtu Financial and partners complete first onchain repo using sovereign digital bond

Virtu Financial, M1X Global, and Tradeweb have announced the completion of the first fully onchain repurchase (repo) transaction utilizing a sovereign digital bond as the securities leg. Executed on the Canton network, the transaction achieved atomic onchain settlement for all elements, including securities delivery, the cash leg, and the return.

The transaction utilized USDM1, a sovereign bond issued natively onchain by the Republic of the Marshall Islands. Structured under New York law as a fully collateralized Brady bond, USDM1 is backed 1:1 by short-dated US Treasuries held in bankruptcy-remote custody. This marks the first instance of a natively issued sovereign digital security serving as collateral in a repo executed through a major institutional electronic trading venue without prime broker intermediation.

The entire repo cycle, including execution and repurchase, was completed in under 10 minutes. This speed is noted as being operationally impossible under current T+1 settlement infrastructure. Unlike previous demonstrations that used digital cash or off-chain securities, this transaction combined natively issued sovereign collateral with fully onchain atomic settlement across both legs.