BitGo Bank and Trust will now offer qualified custody services for USDM1, the first blockchain-based sovereign bond token. USDM1 is backed one-to-one by US Treasury securities and issued natively onchain by the Marshall Islands government to fund a universal basic income program.
The partnership gives institutional investors a regulated custody solution for holding the sovereign bond token, addressing a key infrastructure requirement for institutional adoption. The custody service supports investors trading USDM1 across Stellar, Ethereum, and Solana blockchains.
The Marshall Islands has been a pioneer in using blockchain technology for sovereign finance. The USDM1 token represents a digital version of a government bond that can be traded and settled on blockchain infrastructure with T+0 settlement timing.
BitGo involvement provides the qualified custody layer that institutional investors require before they can participate in tokenized sovereign debt markets. The company offers a Go Network that enables off-exchange settlement, reducing counterparty risk for large transactions.
The development represents another step in the convergence of traditional fixed-income markets with blockchain technology. Tokenized bonds offer potential efficiencies in issuance, settlement, and secondary market trading compared with conventional bond market infrastructure.
The Marshall Islands program uses proceeds from the USDM1 issuance to fund a universal basic income for its citizens, making this a unique experiment in using blockchain-based sovereign finance to address social welfare objectives.
This article was adapted from Blockonomi. Read the original here.
