Key facts
- Ondo Finance has launched tokenized versions of BlackRock's iShares Core S&P 500 ETF (IVV) and Micron Technology (MU) shares.
- This launch utilizes the SEC's third-party custodial tokenization model.
- The tokenized securities are issued on Ethereum.
- Oasis Pro TA acts as the transfer agent, and Broadridge provides shareholder services.
- The product is currently not available to U.S. investors.
Ondo Finance has launched its first implementation of the SEC's third-party custodial tokenization model, tokenizing blockchain-based versions of BlackRock's iShares Core S&P 500 ETF (IVV) and Micron Technology (MU) shares. This initiative is designed to operate within the existing U.S. securities system, adhering to the SEC's staff statement for third-party tokenized securities.
The tokenized securities are issued on Ethereum, with Ondo's acquired transfer agent, Oasis Pro TA, handling the issuance. Financial infrastructure provider Broadridge will manage proxy voting, regulatory disclosures, and shareholder communications, ensuring token holders receive the same governance rights as traditional investors. However, the product is not yet available to U.S. investors.
Ondo states this is the first production deployment of the SEC's custodial tokenization model, demonstrating that blockchain-based securities can integrate into the current U.S. regulatory and custody framework. CEO Ian De Bode highlighted that Ondo has built the necessary infrastructure to support various tokenization models within the United States, providing a foundation for expanded access to on-chain investments for U.S. investors.
Tokenization, the representation of traditional assets as blockchain-based tokens, is a rapidly growing area. Proponents suggest it can modernize capital markets with faster settlement, 24/7 trading, and easier asset movement. Citi projects tokenized securities could reach a $5.5 trillion market size by 2030.
The launch follows the SEC's January staff statement, which detailed how a third-party custodial model could comply with securities laws. This model involves a regulated intermediary holding conventional shares in custody and issuing tokens representing entitlements to those assets, differing from issuer-sponsored tokenization. This approach gained attention following OpenAI's statement that Robinhood's tokenized offering tied to its shares did not represent equity in the company.
Under Ondo's model, the underlying IVV and Micron shares remain in the traditional U.S. custody chain, while Oasis Pro TA mints one-for-one tokenized entitlements on Ethereum. Regulated custodians hold the underlying securities, and existing controls enforce transfer restrictions. Broadridge's integration extends shareholder communications and voting rights to token holders.
This development occurs as tokenized equities gain traction. Robinhood has expanded its tokenized stock offerings, and institutions like the Depository Trust & Clearing Corporation (DTCC), Nasdaq, and the NYSE are exploring blockchain integration into regulated securities markets. Ondo is already a significant player in tokenized securities outside the U.S., with over $1 billion in tokenized assets across more than 430 securities.