Ondo Finance has launched a new service, enabling approved institutions to tokenize stocks using shares they already hold, bypassing the need for fresh cash deposits. This approach aims to broaden on-chain trading options and improve liquidity for tokenized equity products.
New conversion method on Ethereum and BNB Chain
The new feature is now active on both Ethereum and BNB Chain. It leverages Alpaca’s Instant Tokenization Network (ITN), allowing institutions with Alpaca accounts to transfer existing equity to Ondo for tokenization. Alpaca Clearing, a FINRA-regulated broker dealer, provides the brokerage and custody infrastructure for the transfers.
Institutions can move shares internally from their Alpaca account to Ondo’s Alpaca account. Ondo then creates tokens on the blockchain representing those shares. The process is designed to be automated, eliminating the need for manual approval with every transaction.
After conversion, the institutional client can redeem the Ondo Stocks tokens to have their original shares returned to the Alpaca account. Conversions on Solana are not included in the current rollout, with the new method supporting only Ethereum and BNB Chain at this time.
Ondo stated that the launch of in-kind conversions is intended to help market makers replenish token inventory, providing improved liquidity and narrower bid-ask spreads for tokenized stocks.
Mini dictionary: Alpaca Clearing, a US-based financial technology company, offers brokerage and clearing services for fintech platforms, and is registered as a broker dealer with FINRA.
Eligibility limited to approved institutions
The new offering is only available for institutions with approved Alpaca accounts. Participation also requires an active Ondo account. According to Ondo, the ITN-powered conversion is not a general feature for all platform users and is allocated on a case-by-case basis for qualified institutions.
Ondo also highlights that its stock tokens are only offered to non-US persons. These tokens provide economic exposure to the underlying securities but do not represent stocks, exchange-traded funds (ETFs), or American Depository Receipts (ADRs).
The company claims that institutions benefit from direct access to digital representations of stocks, which can increase flexibility and efficiency in portfolio management.
Ondo’s growth and recent milestones
As of September 22, Ondo reported a total of $3.63 billion in distributed assets across 441 financial products. Its stock tokenization platform reached $1 billion in total value locked (TVL) in May 2026, following its launch in September 2025.
Recent on-chain activity indicates strong interest, with an individual trader executing a $2.3 million single Ethereum trade for QQQon tokens in August.
In July, Ondo expanded its offerings for non-US users by introducing leveraged perpetual futures on a range of US stocks, ETFs, and commodities.
The company’s announcement comes soon after the US Securities and Exchange Commission (SEC) ordered temporary, conditional exemptions for some tokenized securities venues on September 17, signaling a changing regulatory landscape for digital securities issuers.
