M1X Global has raised $5.5 million in a seed equity round led by Paradigm, with Breed VC joining as the only other investor, the company told The Block. The round was described as oversubscribed, with Paradigm preempting the process and taking most of the allocation.

No investors received board, advisory or observer seats as part of the seed round, according to M1X Global president and COO Jordan Goldman. The new capital brings the company’s total funding to $8.5 million, following a $3 million angel round that closed in March with backers including former Coinbase CTO Balaji Srinivasan and Cumberland Labs CEO Tama Churchouse.

M1X Global builds sovereign financial infrastructure and worked with the Republic of the Marshall Islands to issue USDM1, a tokenized, U.S. dollar-denominated sovereign debt instrument backed one-to-one by U.S. Treasuries. USDM1 is issued natively by a sovereign on public blockchains, initially on Stellar and now also available on Canton and Solana.

Goldman said sovereign debt remains one of the world’s largest asset classes but had not previously existed natively onchain. “USDM1 is a modernization of existing market principles as onchain sovereign collateral,” he said, positioning the instrument as a bridge between traditional sovereign issuance and 24/7 tokenized markets.

The initial use case for USDM1 is domestic government aid disbursements in the Marshall Islands via the Lomalo wallet, enabling near-instant payments compared to traditional correspondent banking rails. A recent integration with Bank of Guam, an FDIC-insured U.S. bank, is intended to connect USDM1 more directly with regulated banking infrastructure.

Structurally, Goldman said USDM1 differs from privately issued digital dollar products because it is sovereign debt backed one-to-one by short-duration U.S. Treasury securities under New York law. He said this design allows the instrument to be deployed across repo, margin and secured financing markets while supporting 24/7 settlement. USDM1 is custodied on Anchorage Digital’s federally regulated platform, structured to be bankruptcy remote and capable of inclusion in legal netting sets.

M1X Global said USDM1 has already been used in institutional working groups with Bank of America, Citadel Securities, Virtu Financial, Tradeweb and DTCC to assess how onchain sovereign debt could improve collateral mobility and settlement. Goldman added that the product targets needs identified by the International Swaps and Derivatives Association and the Futures Industry Association for high-quality government collateral that can operate in always-on tokenized markets.

Near term, the startup is focused on institutional adoption of USDM1 rather than broadening its sovereign client base. Goldman cited specific utility for licensed entities such as swap dealers and said the company aims to expand USDM1 support across banks, custodians, ATSs, margin and risk platforms, off-exchange settlement networks and post-trade infrastructure, as well as OTC desks, prime brokers and exchanges.

Goldman noted that one challenge is educating institutions on how a new onchain sovereign instrument fits within existing market structures, despite similarities to long-standing Brady bond frameworks. M1X Global currently has 11 employees and plans to hire across multiple functions as it scales.

Paradigm partner Arjun Balaji said the firm views sovereign financial infrastructure as a potential next stage of blockchain adoption. “24/7 markets require collateral that can move 24/7,” Balaji said. “USDM1 shows how sovereign debt can be issued natively onchain. M1X Global has assembled the rare mix of government, capital markets, and crypto expertise needed to bring this model to institutional scale.”

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