M1X Global : STS Digital to Accept and Pledge USDM1 Across Derivatives and Structured Products Books
Bermuda-regulated principal dealer adopts the world's first natively issued, USD-denominated sovereign bond as collateral under industry-standard derivatives and financing documentation
NEW YORK, Aug. 13, 2026 /PRNewswire/ -- STS Digital Ltd., a Bermuda-regulated principal trading firm specializing in digital asset derivatives, structured products, and institutional liquidity solutions, today announced that it will accept USDM1 from eligible counterparties and pledge the instrument as collateral across its over-the-counter derivatives, structured products, and financing relationships. Through its institutional-grade trading infrastructure and principal market-making model, STS Digital provides institutional counterparties with access to deep liquidity, advanced derivatives capabilities, and bespoke solutions across digital asset markets. The adoption of USDM1 further expands STS Digital's commitment to bridging traditional financial infrastructure with the next generation of digital asset markets.
USDM1 brings on-chain collateral with 24/7 transferability into established institutional derivatives frameworks. Although corporate digital dollar instruments are transferable on-chain, for institutions, perfecting security interests in them can present challenges. As instruments, they are often not covered in industry netting opinions. As a result, their ability to provide collateral and capital efficiencies is often limited.
USDM1 can be used as initial or variation margin under standard derivatives documentation supporting legally enforceable netting sets, and may reduce unsecured counterparty exposure and the amount of other collateral required to support a portfolio.
The economic significance of close-out netting is well established in traditional derivatives markets. Bank for International Settlements data show that, at year-end 2025, legally enforceable netting reduced the gross market value of outstanding OTC derivatives by approximately 85.3%, or $19.4 trillion. USDM1 brings on-chain collateral into the frameworks supporting these efficiencies.
USDM1 is compatible with repo and secured-financing arrangements under standard GMRA and GMSLA documentation and accrues a sovereign coupon. It enables title-transfer repo, collateral substitution and reuse within established institutional frameworks. When held unencumbered, USDM1 maintains look-through to the credit of pledged US Treasury instruments and supports treatment as Level 1 HQLA under Basel standards.[1]
Maxime Seiler, CEO of STS Digital, said:
"As a principal derivatives dealer, collateral efficiency directly affects how we price, fund and scale our book. Accepting USDM1 from eligible counterparties, pledging it across our own trading and financing relationships and utilizing it in structured products supports more efficient inventory financing, tighter client pricing and greater trading capacity per dollar of balance sheet."
Jordan Goldman, President and Chief Operating Officer of M1X Global, said:
"STS Digital is one of the most active and sophisticated crypto derivatives dealers. As digital assets enter a new phase of institutional adoption, USDM1 connects on-chain markets with the legal, collateral and risk-management frameworks regulated institutional counterparties require while preserving the benefits of 24/7 settlement."
About USDM1
USDM1 is a fully collateralized, USD-denominated sovereign bond natively issued on-chain by the Republic of the Marshall Islands. It is structured in the style of a Brady bond under New York law, with an explicit customary waiver of sovereign immunity, and secured on a 1:1 basis by short-duration US Treasury instruments pledged by a US trust company in a bankruptcy-remote structure.
The Republic of the Marshall Islands operates exclusively on the US dollar standard under its Compact of Free Association with the United States. As a dollar-denominated sovereign obligation, USDM1 does not carry foreign-exchange or convertibility risk. Holders maintain enforceable rights to par redemption against a sovereign issuer and a perfected, first-priority security interest in Treasury collateral under UCC 8/9. For more on USDM1, see https://mof.gov.mh/usdm1-whitepaper/.
USDM1 is compatible with ISDA, GMRA and GMSLA agreements for derivatives, repo and secured lending, and is eligible for robust US close-out netting protections. Cleary Gottlieb Steen & Hamilton LLP serves as issuer's counsel and advised with respect to the structuring of the instrument under New York law, with the participation of partners specializing in sovereign debt, UCC and secured transactions, creditors' rights, netting and digital asset markets.
About STS Digital
STS Digital Ltd. is a regulated principal trading firm specialised in digital asset derivatives and structured products, providing institutional-grade market access to professional clients and financial institutions. Clients can trade more than 400 tokens across vanilla and exotic options, spot, and structured products through a unified platform spanning UI, API, and voice channels. Founded by derivatives veterans, STS Digital delivers deep liquidity, competitive pricing, and rigorous risk management to ensure a seamless trading experience.
STS Digital Ltd. is licensed under the Bermuda Monetary Authority (BMA), holding a Full DABA "F" Licence – the highest level of authorisation available in the jurisdiction. The BMA is a tier-one financial regulator with active membership in the IAIS, FSB, and OECD, and holds full Solvency II equivalence with the European Union.
STS Digital is backed by leading industry investors including CMT Digital, Kraken's parent Payward, Arrington Capital, Strobe Ventures, F-Prime, and BitRock Capital.
About M1X Global
M1X Global is a sovereign financial infrastructure and technology company bridging public finance and on-chain capital markets. Operating in public-private partnership with the Republic of the Marshall Islands, M1X coordinates the legal, compliance, technology, custody and institutional infrastructure behind sovereign digital instruments.
Disclaimer
Statements in this release regarding the legal, accounting, regulatory and capital characteristics of USDM1 are provided by the issuer and its advisors and have not been independently verified by STS Digital.
Securities Act
The content of this communication is for informational purposes only and is not intended to market, offer, or solicit you to buy or sell USDM1 or any financial product directly from M1X Global, STS Digital, the Republic of the Marshall Islands or otherwise.
USDM1 is being offered and sold solely outside the United States in reliance on Regulation S under the United States Securities Act of 1933, as amended (the "Securities Act"). The Republic of the Marshall Islands has not registered any offering of USDM1 under the U.S. Securities Act, or any other U.S. federal and state securities laws. Accordingly, USDM1 may not be offered, sold, pledged or otherwise transferred in the United States or to, or for the account or benefit of, U.S. Persons (as defined in Regulation S), unless they are registered, or exempt from, or not subject to, registration under the Securities Act.
Nothing in this communication constitutes, or should be construed as, a recommendation by M1X Global, STS Digital, the Republic of the Marshall Islands or any third party to acquire or dispose of USDM1 or any other security, or to engage in any investment strategy or transaction.
Prospective investors are urged to carefully read the offering memorandum prepared in connection with the offering of USDM1 in its entirety, including all annexes, appendices, and supplements thereto, before making any investment decision. The offering memorandum contains important information regarding, among other things, the terms of the securities, the risks associated with an investment therein, and the financial condition and business of the issuer. Prospective investors are solely responsible for determining whether any investment, security or strategy, or any other product or service, is appropriate or suitable for them based on their investment objectives and personal and financial situation. Prospective investors should consult an attorney or tax professional regarding their specific legal or tax situation.
Forward-Looking Statements
This release contains forward-looking statements, including statements regarding the intended acceptance, pledging and use of USDM1 by STS Digital. Forward-looking statements are not historical facts. Words such as anticipates, believes, estimates, expects, intends, plans, will and similar expressions are intended to identify them. Such statements reflect current views and are subject to risks and uncertainties, and rest on assumptions including general economic and market conditions, industry conditions and operating factors. There is no guarantee that the expected events or results will occur, and any change in those assumptions could cause actual results to differ materially from current expectations.
[1] HQLA classification is subject to the applicable regulations and regulatory determinations of each financial institution's prudential supervisor. Nothing in this communication constitutes a representation that USDM1 qualifies as Level 1 HQLA under applicable U.S. banking laws.
Share this article