Ondo Finance Enables In-Kind Stock Tokenization via Alpaca

Ondo Finance launched an in-kind conversion feature that allows institutions to mint tokens using existing shares. This new route removes the need for separate cash funding during the tokenization process.

The service became available on Ethereum and BNB Chain on September 21. It operates through Alpaca’s Instant Tokenization Network and serves as a primary-market entry point.

Institutional access requires specific approvals

Access to this feature is limited to institutions approved by Alpaca on a case-by-case basis. Participants must maintain active accounts with both Ondo and Alpaca before they can activate the service.

The integration eliminates the manual approval requirement for each individual conversion event. This streamlines the workflow for market movers who frequently adjust their digital inventories.

Mechanics of the token swap

Institutions transfer underlying shares from their Alpaca accounts to Ondo’s designated account via internal book transfers. Ondo then issues the corresponding tokenized positions on the supported blockchain networks.

Redemption reverses this process by sending the underlying shares back to the institution’s brokerage account. This mechanism allows firms to move inventory between traditional and on-chain venues without cash.

Market impact and asset scale

Ondo stated that this model reduces financing costs and timing mismatches for market makers. The company expects tighter spreads and deeper liquidity in secondary markets as a result of this change.

RWA.xyz tracked 3.63 billion dollars in Ondo distributed assets across 441 products as of September 22. Crypto News reported that these figures highlight the growing scale of the tokenized asset ecosystem.