Ondo Finance has rolled out an in-kind conversion system that lets eligible institutions mint tokenized stocks and exchange-traded funds using the underlying securities rather than cash, and redeem those tokens back into the original shares. Under the setup, approved clients can move 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 for redemptions.
The new option sits alongside Ondo’s existing cash-funded model, where institutions that already hold the underlying shares still need to provide separate cash to mint matching tokens. Ondo said the in-kind route can cut the extra capital required to build tokenized inventory, while also reducing financing costs and timing mismatches between traditional securities positions and tokenized holdings. The service is currently available on Ethereum and BNB Chain and is limited to institutional clients approved by Alpaca, with active accounts required at both Alpaca and Ondo. According to RWA.xyz, Ondo has about $3.63 billion in distributed assets across 441 products, placing it second behind Securitize by onchain value.
Ondo Finance has launched an in-kind conversion system that allows eligible institutions to turn stocks and exchange-traded funds directly into tokenized versions, or redeem those tokens for the underlying shares.
Shares can now be used directly for minting and redemption
Under the new setup, approved institutions can transfer shares from their Alpaca accounts to Ondo through an internal book transfer. Ondo then issues the corresponding Ondo Stocks tokens onchain. The process also runs in reverse, allowing institutions to redeem the tokens for the underlying shares.
The in-kind route expands on Ondo’s existing cash-funded model. In that structure, an institution that already owns the underlying shares still has to provide separate cash to mint the matching tokens.
Alternative to the cash-funded model
With the new mechanism, institutions can use the shares they already hold instead of adding cash. Ondo said that could reduce the amount of extra capital needed to create tokenized inventory. The company also said the change may lower financing costs and reduce timing mismatches between traditional share positions and tokenized holdings.
Available on Ethereum and BNB Chain
The conversion service is currently live on Ethereum and BNB Chain. Access is limited to institutional clients approved by Alpaca, and participants must maintain active accounts with both Alpaca and Ondo.
Ondo ranks among the largest tokenization platforms
By onchain value, Ondo has become one of the largest tokenization platforms in the market. Data from RWA.xyz shows about $3.63 billion in distributed assets across 441 products, putting Ondo in second place behind Securitize.
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