Ondo Finance enables direct stock-to-token conversion for institutional partners
Institutional investors can now transform their stocks and ETFs into tokenized versions through Ondo Finance without the previous requirement of cash deposits for token creation.
A new capability from Ondo Finance enables qualified institutional participants to directly transform their holdings in stocks and exchange-traded funds into tokenized versions of those same assets, while also maintaining the ability to convert the tokens back into the original underlying securities.
Through this newly launched framework, institutions that have received approval can move shares from accounts held with Alpaca to Ondo via an internal book transfer mechanism, after which the platform generates the matching Ondo Stocks tokens on the blockchain. The conversion mechanism functions bidirectionally, enabling institutions to exchange their tokens back for the actual underlying securities whenever desired.
This in-kind transfer capability represents an addition to the cash-based minting approach that Ondo has operated previously. With the earlier framework, an institution possessing the underlying equity securities would still be required to supply separate cash funds in order to generate the tokenized versions of those holdings.
The newly available pathway enables institutions to utilize their existing share holdings directly, which may decrease the volume of extra capital required to establish tokenized asset inventory. According to Ondo, this modification has the potential to lower financing expenses and eliminate timing discrepancies that can occur between conventional share positions and their tokenized counterparts.
The direct conversion service is presently operational on both Ethereum and BNB Chain networks. Participation is limited to institutional clients who have obtained approval from Alpaca, and those wishing to use the service must maintain active accounts with both Alpaca and Ondo platforms.
Ondo has established itself as one of the most prominent tokenization platforms measured by onchain asset value. According to data from RWA.xyz, the platform has approximately $3.63 billion in distributed assets spanning 441 different products, which positions it in second place behind Securitize in the market rankings.