Ondo Finance has launched an in-kind conversion system that enables eligible institutions to mint and redeem tokenized stocks and ETFs using the underlying securities instead of cash. Under the new system, approved institutions can transfer shares from their Alpaca accounts to Ondo through an internal book transfer, with corresponding Ondo Stocks tokens then issued onchain. The process also works in reverse, allowing institutions to redeem the tokens for the underlying securities.
The move expands Ondo's existing tokenization offerings, which already include tokenized US Treasury products and other real-world assets. By allowing in-kind transfers, the company aims to streamline the process for institutional investors who may prefer to hold the underlying securities while also gaining access to onchain representations for trading or DeFi applications.
The announcement did not specify which stocks or ETFs are initially supported, nor did it detail the full list of eligible institutions. The system is limited to approved institutions and is not available to retail investors directly.