Ondo Finance introduced a direct conversion mechanism on September 21 that enables qualified institutions to transform actual stock and ETF holdings into blockchain-based tokenized equivalents. The service operates on both Ethereum and BNB Chain networks through Alpaca's Instant Tokenization Network.
Under the previous cash-funded model, institutions needed to deposit separate capital to create tokenized stock positions, even if they already owned the corresponding securities. The new in-kind mechanism eliminates this requirement by allowing institutions to transfer securities directly from their Alpaca brokerage accounts.
How the Conversion Works
Qualified institutions initiate the process by transferring securities from their personal Alpaca brokerage account to Ondo's designated Alpaca account via an internal book transfer. Ondo then generates corresponding tokenized representations on the chosen blockchain network.
The mechanism functions bidirectionally, allowing institutions holding tokenized securities to redeem them and receive the actual underlying shares directly into their Alpaca brokerage accounts.
According to Ondo, eliminating the redundant cash-funding requirement may decrease financing expenses and minimize temporal discrepancies for market makers managing tokenized asset inventories. The platform suggested this modification might result in narrower bid-ask spreads and enhanced liquidity in secondary trading venues.
Eligibility and Access
Access to the direct conversion mechanism is exclusively available to institutions that receive individual approval from Alpaca. Eligible participants must maintain active accounts with both Ondo and Alpaca before receiving authorization.
Existing Ondo Stocks users experience no modifications to their current service. Ondo Stocks continue to be accessible exclusively to qualified non-U.S. individuals, with U.S.-based clients remaining ineligible for the standard platform offering.
Both Ondo and Alpaca emphasize that tokenized securities deliver economic exposure to referenced assets but do not constitute direct ownership stakes in the underlying corporations unless explicitly structured otherwise.
Platform Scale
Ondo's tokenized securities infrastructure encompasses over 450 products, featuring U.S. equities and exchange-traded funds. The in-kind conversion capability presently supports Ethereum and BNB Chain networks.
According to RWA.xyz statistics, Ondo reported $3.63 billion in distributed asset valuation across 441 products and 485,296 holder addresses as of September 22. Monthly transaction volume reached $1.58 billion.
The platform has expanded across multiple exchanges and digital wallets. MetaMask incorporated over 200 Ondo tokenized U.S. equities and ETFs during 2026. Ondo additionally deployed tokenized assets to Hyperliquid's HyperEVM platform, supporting 35 assets through that partnership.
On September 16, DTCC announced that Oasis Pro Markets, an Ondo subsidiary, became Fund/SERV's inaugural tokenization-platform participant.
