tZERO Adds Sovereign Digital Bond USDM1 to Regulated Custody

In a groundbreaking move for institutional digital asset custody, tZERO Group, Inc., a leader in tokenization infrastructure, has announced that USDM1, a USD-denominated sovereign bond issued natively on-chain by the Republic of the Marshall Islands (RMI), can now be held through tZERO Digital Asset Securities, LLC, an SEC-registered broker-dealer custodian. This development enables institutional participants to securely hold USDM1 within a regulated framework aligned with U.S. securities laws, bridging the gap between traditional finance and blockchain-based assets. USDM1 is backed 1:1 by short-duration U.S. Treasury instruments, structured under New York law with an explicit waiver of sovereign immunity, and advised by Cleary Gottlieb. It combines the legal protections of a traditional fixed income instrument with the efficiency of tokenized assets, paying a coupon and offering enforceable rights to par redemption.

Alan Konevsky, Chairman and CEO of tZERO, emphasized that USDM1 introduces a new category of on-chain sovereign collateral that aligns with institutional custody, financing, and balance sheet management. The addition extends tZERO's regulated infrastructure, allowing institutions to hold sovereign, Treasury-backed digital asset securities within an SEC-registered qualified custodian, integrate on-chain assets into existing frameworks, and access digital asset securities designed for margin, financing, and collateral workflows. USDM1 is currently issued on multiple blockchain networks, including Stellar, Canton, and Solana, and benefits from U.S. close-out netting protections and Level 1 HQLA status under Basel standards.

Looking ahead, tZERO plans to explore broader infrastructure interoperability with USDM1, including expanding availability to its institutional client base, integrating with its SEC- and FINRA-regulated broker-dealer capabilities, and enabling API-level connectivity through tZERO Connect. The parties also expect to evaluate pathways for USDM1 to function as a trading and funding instrument within regulated secondary markets, including tZERO's alternative trading system. This announcement reflects continued momentum in merging traditional financial infrastructure with blockchain, as institutions seek regulated pathways to tokenized securities and on-chain collateral. For more details, see the original release on NEWMEDIAWIRE.