Ondo Finance now lets approved institutions convert stocks and ETFs directly into tokenized shares, or redeem the tokens back, without needing separate cash to mint them. The in-kind option runs alongside Ondo's existing cash-funded model and is live on Ethereum and BNB Chain for clients approved by Alpaca.
Ondo Finance has introduced a way for eligible institutions to convert stocks and exchange-traded funds directly into their tokenized equivalents, or redeem the tokens for the underlying shares. The move adds a second path onto Ondo's existing tokenization setup.
Under the new system, approved institutions transfer shares from their Alpaca accounts to Ondo through an internal book transfer, and Ondo then issues the corresponding Ondo Stocks tokens onchain. The process also works in reverse, letting institutions redeem the tokens for the underlying shares.
That in-kind route sits alongside Ondo's cash-funded model. Under the older system, an institution that already holds the underlying shares must still provide separate cash to mint the matching tokens. The new option lets institutions use those shares instead, which could reduce the extra capital needed to build tokenized inventory.
Ondo said the change could also cut financing costs and reduce timing mismatches between traditional shares and their tokenized positions. However, access stays limited: only institutional clients approved by Alpaca can use it, and participants need active accounts with both Alpaca and Ondo.
The conversions are currently available on Ethereum and BNB Chain. Ondo has grown into one of the largest tokenization platforms by onchain value: RWA.xyz data shows about $3.63 billion in distributed assets across 441 products, ranking it second behind Securitize.
Source: Cointelegraph.com News
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