Ascend Markets, LLC, a wholly owned subsidiary of PSG Digital Labs, Inc. (“Ascend”), and M1X Global have announced the successful completion of the first institutional repurchase agreement (repo) — a collateralized financing structure in which securities are sold with an agreement to rep them at an agreed date and price — executed on the Stellar network. The transaction utilized USDM1, a US dollar-denominated sovereign bond issued natively onchain and secured 1:1 by short-duration US Treasuries. The deal marks a milestone in bringing institutional secured financing onto Stellar, one of the longest-running public blockchains, and extends the network’s established payments and transfer infrastructure into programmable repo markets.

The repo was executed through Ascend’s institutional credit facility using the Stellar network’s smart contracts. It included 72 consecutive programmatic hourly rolls between October 16 and 19, covering overnight and weekend financing without manual intervention. Pricing was set at SOFR — the Secured Overnight Financing Rate, a widely used benchmark for US dollar funding costs — plus 10 basis points, equivalent to an annualized financing rate of 3.98%, with interest accruing daily, a 2% collateral haircut, and a maximum loan-to-value ratio of 98%. The transaction concluded with repayment and the return of the USDM1 collateral, with all aspects of the closing process completing successfully. The trade demonstrates the capital efficiency of tokenized sovereign collateral and Ascend’s support for the asset class.

Multiple Institutional Financing Capabilities Combined

The first institutional repo transaction brought together several important financing capabilities on the Stellar network. These included continuous repo financing under executed and enforceable master repurchase documentation, alongside Stellar smart contracts that supported pledging, financing, automated rolls, repayment, and collateral release. The trade was the first to use Chainlink’s new Data Feeds — the decentralized oracle provider’s service for delivering market data to smart contracts — for USDC, a US dollar-backed stablecoin, on the Stellar network as its price oracle, while USDM1’s published par redemption value supported collateral valuation. Ascend’s infrastructure incorporated identity verification, access permissions, compliance rules, and operational controls.

The transaction used Stellar Asset Contract (SAC) tokens for both legs and demonstrated institutional financing functionality directly on Stellar Mainnet. The aggregate network fees on the Stellar network for the automated hourly rolls added up to a fraction of a cent.

Repo Markets and Collateral Mobility

Repos are foundational to global capital markets, supporting trillions of dollars in daily financing activity. Banks, broker-dealers, trading firms, and investment funds rely on repo to finance securities positions, fund inventory, mobilize collateral, and manage balance-sheet exposures. Roughly 80% of global repo is collateralized by sovereign bonds.

Traditional repo infrastructure operates within established banking, custody, and settlement workflows, which limits institutional flexibility in managing collateral and constrains collateral movement outside business hours. The Ascend–M1X Global transaction demonstrates how secured sovereign debt can be financed, repurchased, and mobilized continuously on public blockchain infrastructure, combining conventional repo economics — including benchmark-linked financing rates, collateral haircuts, and established contractual protections — with automated execution, settlement, and collateral management.

Executive Commentary

Dennis O’Connell, Executive Officer & Co-Founder of Ascend and President of the ERC-3643 Association (the body behind a permissioned token standard used for compliant, identity-gated tokenized assets), said: “Repo is fundamental to institutional capital markets, yet much of the infrastructure supporting it remains constrained by traditional settlement windows. Together with M1X Global, we have demonstrated that repo financing can operate continuously on the Stellar blockchain while preserving the legal protections, compliance controls and financing mechanics that financial institutions require. Accomplishing this trade with transaction-based fees attributable to Ascend’s U.S. broker-dealer subsidiary, together with executed SIFMA Repo Agreements, USDC as settlement, and real sovereign debt during off hours as the first ever institutional repo transaction on the Stellar network, is a tremendous milestone.”

Jordan Goldman, President and Chief Operating Officer of M1X Global, said: “The ability to finance and mobilize collateral is fundamental to how modern capital markets function. By combining secured sovereign debt with programmable repo infrastructure on the Stellar network, institutions have the ability to mobilize the same collateral more efficiently and support more financing activity with a given collateral pool. These transactions demonstrate how blockchain infrastructure and continuous digital markets can expand the capabilities of institutional secured financing.”

About USDM1

USDM1 is a US dollar-denominated sovereign bond issued natively onchain by the Republic of the Marshall Islands under New York law. Structured in the tradition of fully collateralized Brady bonds — the collateralized sovereign bonds that emerged from the 1989 Brady Plan to restructure emerging-market debt — it is secured 1:1 by short-duration US Treasury instruments held in a bankruptcy-remote structure. The instrument is compatible with ISDA, GMRA, and GMLSA agreements for derivatives, repo, and securities lending. Cleary Gottlieb Steen & Hamilton LLP advised as issuer’s counsel. Its integration into Ascend’s financing facility demonstrates how established institutional financing arrangements can be seamlessly extended into continuously operating blockchain networks.

Foundation for Future Activity

The first completed institutional repo on the Stellar network establishes an operational foundation for additional institutional repo and secured financing activity. By combining natively issued secured sovereign debt, institutional custody, enforceable repo documentation, programmable collateral controls, and continuous settlement, the transaction enables institutional financing markets in which collateral can be mobilized, financed, and redeployed around the clock, rather than being limited by conventional settlement windows. How the framework develops from here — additional counterparties, larger collateral pools, or other tokenized assets — will be the signal to watch as continuous onchain repo moves from a first execution toward routine institutional use.

Source: GlobalFintechSeries