Ondo lets institutions convert stocks directly into tokenized shares

Ondo Finance has added an in-kind conversion pathway that enables eligible institutional clients to mint tokenized stocks and exchange-traded funds by delivering the actual underlying securities instead of cash. Under the new flow, institutions approved by Alpaca can move shares from their Alpaca accounts to Ondo through an internal book transfer; Ondo then issues the corresponding tokenized Stocks onchain. The mechanism also supports the reverse: institutions can return tokens to Ondo and receive the underlying shares.

This in-kind option complements Ondo’s preexisting cash-based minting model. Previously, firms that already held the underlying shares still needed to provide separate cash to create the equivalent tokens. Ondo says the new route allows those share holdings to be used directly, which could lower the amount of additional capital required to supply tokenized inventory and help cut financing costs and timing mismatches between the traditional and tokenized positions.

Access to the in-kind conversion is limited to institutional participants who are approved by Alpaca and maintain active accounts with both Alpaca and Ondo. The feature is available on Ethereum and BNB Chain at launch. Ondo did not announce retail availability or broader custodial integrations in the provided material.

Ondo has grown into one of the larger tokenization platforms by onchain value. Data from RWA.xyz cited by the source shows roughly $3.63 billion distributed across 441 products, placing Ondo second in that dataset behind Securitize. The in-kind capability links Alpaca’s brokerage custody flows directly with Ondo’s token issuance process, reflecting continued development of infrastructure connecting traditional securities and onchain tokenized assets.