First Institutional Repo on Stellar Includes 72 Automated Extensions Over Three Days
Key Facts
Ascend Markets and M1X Global announced on October 23, 2026, that they had completed the first institutional repurchase agreement on the Stellar network, in a transaction that tested automatically extendable secured financing outside standard settlement windows. The transaction was executed between October 16 and 19 and included 72 consecutive hourly automated extensions, including overnight and weekend financing, without manual intervention. The parties used USDM1, an on-chain, dollar-denominated sovereign bond backed 1:1 by short-term U.S. Treasury instruments. M1X said the transaction demonstrated the ability to operate the financing and collateral cycle directly on the Stellar network. The transaction ended with repayment of the financing and return of the USDM1 collateral, with closing procedures completed successfully, according to the company.
The transaction was priced at the U.S. Secured Overnight Financing Rate, known as SOFR, plus 10 basis points, equivalent to an annual financing rate of 3.98%, with interest accruing daily. Its terms included a 2% haircut on the collateral value and a maximum loan-to-value ratio of 98%. These terms show how financing costs are linked to a short-term benchmark, while setting the lending margin and the limits governing acceptable collateral value. The company said total network fees for the automated extensions amounted to a fraction of a cent. The statement did not disclose the principal or size of the financing, leaving pricing and collateral details as the available indicators of the transaction’s structure.
The transaction used Stellar asset contract tokens on both sides and was executed directly on the mainnet. M1X said smart contracts supported collateral pledging, financing, automated extensions, repayment and then the release of collateral; this sequence made it possible to repeat financing hourly without manual action. The company said the transaction was conducted under executed and enforceable master repurchase agreement documentation. It also said the structure included identity, access-control, compliance and operational controls. This places the legal and operational elements alongside on-chain automation, without changing the nature of the instrument used or its issuer.
M1X says USDM1 is a sovereign bond issued by the Republic of the Marshall Islands, not a digital U.S. Treasury bond, with its 1:1 backing based on short-term U.S. Treasury instruments. The bond is issued under New York law within a bankruptcy-remote structure, according to information provided by the company. This distinction is central to understanding the collateral: the asset used in the repo is a Marshall Islands sovereign bond, while short-term U.S. Treasury instruments provide the corresponding backing. The statement did not describe the transaction as an interbank settlement, nor did it say the deal dispensed with central clearing. Instead, it described it as institutional secured financing executed on the mainnet.
In the background to the announcement, M1X said about 80% of global repo transactions are secured by sovereign bonds. The statement quoted Ascend’s co-CEO as saying that much of the infrastructure supporting repo markets remains constrained by traditional settlement windows. The consecutive, around-the-clock extensions provide an operational test of the idea of continuing financing and moving collateral overnight and over weekends. However, the announcement concerns one completed transaction and does not provide evidence of widespread adoption of this structure or a shift in market mechanisms. The transaction’s value and the volume of assets that could move through this channel were also not disclosed.
The announcement comes ahead of the Federal Open Market Committee meeting scheduled for October 27 and 28, 2026, a date close to the publication of the transaction details. In a broader development in asset tokenization, the Stellar Development Foundation said the U.S. Depository Trust & Clearing Corporation, DTCC, and the foundation had announced plans to make assets held at DTC available for tokenization on the Stellar network during the first half of 2027. The collaboration is based, according to the foundation, on a no-action letter DTC received from the U.S. Securities and Exchange Commission in December 2025, authorizing it to operate a service for tokenizing real-world assets held in custody. By contrast, the SEC said in January 2026 that the form in which a security is issued, or whether its holders are recorded on or off a blockchain, does not change its status under federal securities laws. Those developments remain part of a broader regulatory and institutional context, while the Ascend and M1X transaction remains a specific test of secured financing using USDM1.