Ondo Finance Enables Institutions to Convert Existing Shares Into Tokenized Stocks
Summary
- Ondo Finance said it has introduced a feature that allows institutional investors to directly convert existing shares they hold into tokenized stocks.
- Ondo Stocks said it supports spot conversions among underlying shares, tokenized stocks, and ETFs through integration with Alpaca's Instant Tokenization Network (ITN).
- Ondo Finance said it expects the feature to reduce cash burdens and expand the liquidity and market depth of tokenized stocks.
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Ondo Finance has introduced a feature that allows institutional investors to convert shares they already hold directly into tokenized stocks. The feature lets them issue tokens using existing shareholdings or redeem those tokens for the underlying shares without deploying additional cash.
According to Ondo Finance's official blog post published on September 21, Ondo Stocks has integrated with Alpaca's Instant Tokenization Network, or ITN, to support spot conversions among underlying shares, tokenized stocks and exchange-traded funds.
If an approved institution transfers shares from its Alpaca account to an Ondo account, Ondo Stocks tokens corresponding to those shares are issued. When the tokens are redeemed, the underlying shares are returned to the institution's Alpaca account.
The feature is available only to institutions that maintain accounts with both Ondo and Alpaca and have received separate approval. It is currently supported on Ethereum and BNB Chain.
Ondo Finance said institutions previously had to set aside cash to issue tokenized stocks, but the new feature allows them to use shares they already hold instead. The company said this could reduce funding burdens for market makers and expand liquidity and market depth in tokenized stocks.
Minseung Kang
minriver@bloomingbit.ioBlockchain journalist | Writer of Trade Now & Altcoin Now, must-read content for investors.