Fintech firm Ascend Markets, in collaboration with the M1X Global platform, announced the successful completion of the first regulated short-term collateralized lending transaction on the Stellar blockchain on October 23, 2026. In this landmark pilot, digitized U.S. Treasury bonds were utilized for interbank settlement, showcasing that collateral can be directly employed without centralized clearing systems.
Uninterrupted Three-Day Transaction
Traditional repo markets often restrict settlement processes to specific working hours, requiring significant operational effort for collateral reassessment. By employing smart contracts, Ascend Markets and M1X Global transferred this cycle to the digital realm. Conducted from October 16 to October 19, the transaction operated seamlessly over the weekend, spanning a full three days.
Throughout the 72-hour period, an algorithm automatically managed consecutive 72-hour extensions without manual intervention. Collateral locking, interest calculation, and settlement steps were executed at the code level, with the total network fee amounting to less than one U.S. cent.
Ascend Markets and M1X Global’s pilot demonstrated the continuous use of digitized U.S. Treasury bonds as collateral, even over weekends, with automated execution.
Transaction Conditions Aligned with SIFMA Standards
The transaction parameters were standardized according to guidelines from the U.S.-based industry association SIFMA. M1X Global-backed USDM1 bonds, paired one-to-one with U.S. Treasury bills, alongside the USDC stablecoin, served as collateral and settlement instruments, all structured under New York law.
The interest rate was fixed at 3.98% annually, incorporating a 10 basis point addition over the SOFR benchmark. A Chainlink oracle infrastructure monitored collateral value, applying a 2% haircut with a credit value ratio capped at 98%.
Compliance was ensured through automated on-chain KYC and AML checks alongside counterpart identity verification, employing ERC3643 and SEP57 standards at the code level.
M1X Global’s USDM1 structure highlighted the potential for distributing liquidity from sovereign debt instruments continuously throughout the year with minimal operational costs.
A New Precedent for Real-World Assets on Stellar
This transaction marks a new phase for capital utilization within the Stellar network. According to rwa.xyz, as of the end of October 2026, the platform holds $3.64 billion in real-world assets, with the majority controlled by Spicet Asset Management’s money market funds at $2.4 billion, followed by Oasis with $557.92 million, and Franklin Templeton at $411.90 million.
The USDM1 mechanism integrated an instantaneous reuse process into this liquidity pool. Consequently, the sector gained a functional example of reallocating resources dependent on public debt instruments independently of centralized infrastructure.
