Ondo lets institutions convert stocks directly into tokenized shares
Reported by Cointelegraph · AI-assisted summary by ChikoCorp AI News Desk
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Summary
Ondo Finance has launched a feature allowing eligible institutions to convert stocks and ETFs directly into tokenized shares and redeem tokenized shares back into the underlying assets. This process involves internal book transfers from Alpaca accounts to Ondo, issuing corresponding Ondo Stocks tokens on blockchain networks. The system currently operates on Ethereum and BNB Chain and is available only to approved institutional clients with active Alpaca and Ondo accounts.
Why it matters
According to Ondo, this new in-kind conversion option could lower the additional capital institutions need to mint tokenized shares, potentially reducing financing costs and timing mismatches between traditional shares and their tokenized equivalents. The source does not provide further commentary on broader market or policy implications.
Key context
Previously, Ondo's tokenized share minting required institutions to provide cash even if they already held the underlying shares. The new method allows direct use of existing shares to create tokens, complementing the existing cash-funded approach. Ondo is a significant player in tokenized assets, with about $3.63 billion in distributed assets across 441 products, ranking second behind Securitize according to RWA.xyz data.
Key numbers and entities
Ondo Finance, Alpaca, Ethereum, BNB Chain, RWA.xyz, Securitize, $3.63 billion in distributed assets, 441 tokenized products.
What remains unclear
The article does not specify the identity or criteria of the "approved institutions," nor does it detail any regulatory considerations or technical specifics on how the internal book transfer is securely managed. It also lacks information on the adoption rate or market reaction to this new feature.