Ondo enables institutions to convert shares into tokenized assets

Ondo Finance has introduced a system that lets eligible institutions convert stocks and exchange-traded funds directly into tokenized equivalents, or redeem the tokens for the underlying shares. Approved institutions can transfer shares from their Alpaca accounts to Ondo through an internal book transfer, after which corresponding Ondo Stocks tokens are issued onchain. The process also works in reverse, allowing institutions to redeem the tokens for the underlying shares. The in-kind option supplements Ondo's existing cash-funded model, which requires an institution that already holds the underlying shares to provide separate cash to mint the corresponding tokens. Ondo said the new route could reduce the additional capital needed to create tokenized inventory. Ondo also said it could reduce financing costs and timing mismatches between traditional shares and tokenized positions. The conversions are currently available on Ethereum and BNB Chain. Access is restricted to institutional clients approved by Alpaca, and participants need active accounts with both Alpaca and Ondo. Ondo has grown into one of the largest tokenization platforms by onchain value. Data from RWA.xyz shows about $3.63 billion in distributed assets across 441 products, ranking Ondo second behind Securitize.