Ondo Introduces Direct Stock to Token Conversion for Institutional Clients

Tokenization platform Ondo Finance has launched a new system allowing approved institutions to convert stocks and exchange-traded funds directly into tokenized versions, without needing to provide separate cash funding.

How the New System Works

Under the updated process, eligible institutions can transfer shares through an internal account transfer, triggering the issuance of corresponding tokenized shares on the blockchain. The system also works in reverse, allowing institutions to redeem tokens back into the underlying securities. This adds to Ondo’s existing model, which previously required institutions to supply cash separately to mint tokens even if they already held the underlying shares.

Benefits for Institutional Clients

By allowing shares themselves to be used in the conversion process, the new approach could reduce the amount of additional capital institutions need to create tokenized inventory. The company said this could also help lower financing costs and reduce timing gaps between traditional and tokenized positions. The feature is currently available on two blockchain networks, with access limited to institutional clients that maintain approved accounts with both platforms involved.

Ondo’s Growing Market Position

Ondo has become one of the largest platforms in the tokenized asset space, with billions of dollars in assets distributed across hundreds of products, placing it among the top providers in the sector alongside its closest competitor.