Ondo Launches In-Kind Conversion for Tokenized Stocks and ETFs

Ondo Finance has rolled out an in-kind conversion mechanism that enables approved institutional investors to mint and redeem tokenized stocks and exchange-traded funds by tendering the underlying securities directly — eliminating the need to convert holdings into cash first. The move marks a significant step in bridging traditional equity markets with blockchain-based asset infrastructure.

For institutions holding large equity positions, the ability to move assets onto a tokenized rail without liquidating them first carries meaningful operational and tax efficiency advantages. Converting to cash before minting tokenized shares introduces market exposure gaps, potential tax events, and transaction costs — friction points that in-kind transfers sidestep entirely.

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The system is limited to approved institutions, reflecting the regulatory reality that tokenized securities remain tightly governed. Ondo's approach mirrors the in-kind creation and redemption mechanism that defines how ETFs operate in traditional markets, where authorized participants exchange baskets of securities rather than cash. Applying that logic to blockchain-based instruments could accelerate institutional adoption by making the on-chain experience feel more familiar to traditional asset managers.

The launch positions Ondo as a key infrastructure player in the real-world asset tokenization space, a sector that has drawn growing attention from major financial institutions and asset managers seeking blockchain-native exposure to conventional instruments. By aligning tokenized asset mechanics with established market conventions, the company is making a direct pitch to Wall Street's operational sensibilities.

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