BitGo's Role in Custody and Off-Exchange Settlement for USDM1, the World's First Onchain Sovereign Bond

On July 17, 2026, BitGo Bank & Trust, N.A. — an OCC-regulated digital asset trust bank and subsidiary of BitGo Holdings, Inc. (NYSE: BTGO) — announced it would provide institutional-grade qualified custody and off-exchange settlement services for USDM1, the world's first natively issued onchain secured sovereign bond .

This article examines exactly what BitGo is doing for USDM1, how the bond is structured, and why it matters for institutional crypto adoption.

BitGo's Custody and Settlement Services

BitGo offers two core services for USDM1. First, institutional clients can hold USDM1 in segregated, regulated custody accounts on BitGo's platform. Second, they can use those holdings as collateral or for T+0 settlement through BitGo's Go Network Off-Exchange Settlement (OES) across all three supported blockchains — Stellar, Ethereum, and Solana .

The Go Network OES is particularly notable: it enables institutions to access exchange liquidity without moving assets out of BitGo's regulated cold custody, mitigating counterparty and commingling risk . Assets stay in BitGo's bankruptcy-remote custody, in the client's name and under their control, while still being deployable for trading .

The service covers all three blockchains where USDM1 is available — Stellar, Ethereum, and Solana .

How USDM1 Is Structured and Backed

USDM1 is a USD-denominated secured sovereign bond issued by the Republic of the Marshall Islands. Each token is backed 1:1 by short-term U.S. Treasury instruments held in a bankruptcy-remote arrangement . The token itself is the bond — it represents secured sovereign debt directly .

Legally, USDM1 is structured under New York law as a fully collateralized Brady bond with daily value accrual . The bond carries a perfected first-priority security interest and a sovereign immunity waiver, giving holders direct, enforceable rights to the underlying Treasury collateral . Cleary Gottlieb served as issuer's counsel .

The interest rate is benchmarked to the 1-month U.S. Treasury rate (H.15) minus a spread of 200 basis points (2%) . For context, the 1-month Treasury rate stood at approximately 3.73% on July 17, 2026, meaning USDM1 would yield roughly 1.73% at that time .

The bond is also designed to qualify as High-Quality Liquid Assets (HQLA) under Basel standards, with Surus Trust Company serving as U.S. trustee, collateral agent, and additional custodian .

The UBI Program and Launch Timeline

USDM1 wasn't just a financial experiment — it was built to fund a real social program. In December 2025, the Republic of the Marshall Islands launched USDM1 on the Stellar blockchain and completed the world's first on-chain Universal Basic Income (UBI) disbursement . The ENRA program delivers instant digital transfers to over 33,000 residents across the nation's remote island communities, replacing what had previously been quarterly cash shipments .

The bond's yield funds this 20-year nationwide UBI program . The Stellar Development Foundation served as the endorsing infrastructure partner and issued a multimillion-dollar grant for USDM1's development . UBI disbursements began flowing via USDM1 in November 2025 .

Bank of Guam Integration (June 2026)

On June 22, 2026, the Republic of the Marshall Islands Ministry of Finance announced a collaboration with Bank of Guam, an FDIC-insured institution, to accept USDM1 deposits and withdrawals via the Lomalo digital wallet . This integration allows citizens to convert USDM1 into U.S. dollars at participating Bank of Guam branches, bridging the gap between the onchain bond and traditional banking .

Anchorage Digital's Custody Role

BitGo is not the only regulated custodian involved with USDM1. Anchorage Digital, home to America's first federally regulated digital asset bank, serves as a key infrastructure partner providing custody, settlement, and collateral management services that make USDM1 available to institutions . Anchorage Digital's role spans three layers:

• Custody: Safeguarding holdings with bankruptcy-remote regulated custody
• Settlement: Enabling secure onchain settlement
• Collateral management: Supporting the 1:1 backing by U.S. Treasury instruments

BitGo Holdings and the Fortune 500

The BusinessWire press release identifies BitGo Holdings, Inc. as listed on the NYSE under ticker BTGO , but no source in the current result set confirms or denies BitGo Holdings' inclusion in the 2026 Fortune 500. That claim remains unverified.

Summary of Key Facts

Feature	Detail	Source
Custodian	BitGo Bank & Trust (OCC-regulated)
Settlement	Go Network OES, T+0 across Stellar, Ethereum, Solana
Backing	1:1 short-term U.S. Treasuries
Legal structure	New York law, Brady bond, daily accrual
Legal counsel	Cleary Gottlieb
Interest rate	1-month UST (H.15) minus 200 bps
Initial launch	December 2025 on Stellar
UBI program	On-chain ENRA disbursements to 33,000+ citizens
Bank of Guam	Deposits/withdrawals via Lomalo wallet (June 2026)
Anchorage Digital	Custody, settlement, collateral management
BitGo in Fortune 500	Unverified (source not found)	N/A