NEW YORK — tZERO Group announced on June 4 that institutional investors can now hold USDM1, a U.S. dollar-denominated sovereign digital bond issued by the Republic of the Marshall Islands (RMI), through tZERO Digital Asset Securities, an SEC-registered broker-dealer custodian of digital assets.
The development allows eligible institutional participants to custody USDM1 within a regulated broker-dealer framework governed by U.S. securities regulations. According to the announcement, accounts may be opened through tZERO's broker-dealer entities to hold the asset alongside other digital securities.
USDM1 is structured as sovereign debt issued natively on blockchain networks and is backed on a 1:1 basis by short-duration U.S. Treasury instruments. The security is issued under New York law and includes customary legal provisions, including a waiver of sovereign immunity. Each unit represents an interest in sovereign debt collateralized by pledged U.S. Treasury assets.
The instrument combines characteristics of traditional fixed-income securities with blockchain-based settlement capabilities. It pays a coupon and provides holders with redemption rights against the sovereign issuer. The collateral is maintained through a U.S. trust structure that holds a first-priority security interest in the pledged Treasury instruments under New York law.
USDM1 is currently supported on multiple blockchain networks, including Stellar, Canton, and Solana. The Marshall Islands and tZERO stated that the asset is designed to integrate with existing institutional custody, financing, and collateral management frameworks. The announcement also noted that USDM1 may be compatible with certain margin, financing, and secured funding workflows used by institutional market participants.
The addition of USDM1 expands the range of tokenized securities available through tZERO's regulated infrastructure. The company said it plans to evaluate future interoperability initiatives involving custody, clearing, connectivity services, and potential secondary-market applications. These initiatives remain subject to regulatory, operational, and market considerations.
USDM1 forms part of a broader trend in which financial institutions are exploring regulated methods of accessing tokenized securities and blockchain-based collateral. Market participants have increasingly focused on integrating digital assets into established financial and operational frameworks while maintaining compliance with existing regulatory standards.
The Republic of the Marshall Islands issues USDM1 as sovereign debt collateralized by U.S. Treasury instruments held in bankruptcy-remote custody arrangements. The Marshall Islands uses the U.S. dollar as its sole legal tender under its Compact of Free Association with the United States.
The announcement emphasized that USDM1 is offered outside the United States pursuant to Regulation S of the U.S. Securities Act and that the release does not constitute an offer to sell or a solicitation to purchase securities. Investors are advised to review official offering documents and assess relevant risks before making investment decisions.
