Ondo cuts out the cash middleman: institutions can now swap stocks for tokens, and back 🪙

Ondo Finance has rolled out a direct conversion path that lets approved institutions turn traditional stocks and exchange-traded funds into Ondo's tokenized equivalents — and redeem those tokens for the underlying shares — without going through its cash-funded minting process.

Under the new in-kind mechanism, eligible institutions can move shares from their Alpaca accounts to Ondo via an internal book transfer, after which matching Ondo Stocks tokens are issued onchain. The flow also runs in reverse, allowing participants to redeem tokens for the underlying securities.

Ondo's existing cash-funded model required institutions holding the underlying shares to still supply separate cash to mint the corresponding tokens. The new route lets those same shares be used as the input, a structure Ondo said could reduce the additional capital needed to build tokenized inventory, lower financing costs, and narrow timing gaps between traditional share positions and their tokenized counterparts.

Conversions are live on Ethereum and BNB Chain. Access is limited to institutional clients approved by Alpaca, and participants must hold active accounts with both Alpaca and Ondo.

Ondo has become one of the largest tokenization platforms by onchain value. RWA.xyz figures put Ondo's distributed assets at roughly $3.63 billion across 441 products, placing it second behind Securitize.