Ondo Finance expands tokenized stock conversion for institutional clients
Institutional adoption of tokenized securities is widening as platforms look for ways to reduce the capital burden of moving traditional assets onchain. Ondo Finance now allows eligible institutions to convert stocks and exchange-traded funds directly into tokenized equivalents, or redeem those tokens for the underlying shares.
Highlights
- Ondo Finance launches an in-kind tokenized stock conversion, allowing approved institutional clients to transfer shares directly from Alpaca to Ondo and receive onchain tokens.
- The in-kind model minimizes additional capital requirements and reduces financing costs by enabling share transfers instead of requiring extra cash to mint tokens.
- Ondo now offers conversions on Ethereum and BNB Chain, holds $3.63 billion in onchain value across 441 products, and ranks behind Securitize in the asset tokenization market.
In-kind conversion model for tokenized shares
As reported by Cointelegraph, Ondo Finance introduces a system that lets approved institutions transfer shares from their Alpaca accounts to Ondo through an internal book transfer and receive corresponding Ondo Stocks tokens onchain.The process also works in reverse, allowing institutions to redeem tokenized holdings for the underlying shares. The in-kind structure adds to Ondo's existing cash-funded model, under which an institution holding the underlying shares still needs to provide separate cash to mint matching tokens.
By using the shares themselves instead of additional cash, the new route could lower the extra capital needed to create tokenized inventory. Ondo says the change could also reduce financing costs and timing mismatches between traditional share holdings and tokenized positions.
Platform reach and tokenization market position
The conversions are currently available on Ethereum and BNB Chain. Access is limited to institutional clients approved by Alpaca, and participants need active accounts with both Alpaca and Ondo.Ondo is one of the largest tokenization platforms by onchain value. Data from RWA.xyz shows about $3.63 billion in distributed assets across 441 products, placing the company second behind Securitize and underscoring growing competition in the real-world asset tokenization sector.
Our earlier coverage of Securitize highlighted the surge of investor interest in tokenized financial assets as the company gained visibility in public markets and positioned itself as a full-stack, regulated tokenization platform. We also noted that the move was reinforced by a temporary SEC rule allowing limited trading of U.S. tokenized stocks, which added momentum to broader adoption of tokenized securities.
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