Key Takeaways:
Ondo Finance became the first company to tokenize U.S.-listed securities within the SEC's custodial framework, placing BlackRock's IVV ETF and Micron shares on Ethereum with full shareholder rights.
Ondo Finance on Thursday launched the first production deployment of the SEC's third-party custodial tokenization model, issuing tokenized entitlements to BlackRock's iShares Core S&P 500 ETF and Micron shares on Ethereum through its registered transfer agent Oasis Pro TA.
"Ondo has built the regulatory, product, and service infrastructure to support all major models within the United States," Ian De Bode, CEO of Ondo Finance, said in a statement. "Today's milestone shows we can tokenize securities in ways that meet both market and regulatory requirements, for U.S. and global investors."
Under the structure, the underlying IVV and Micron shares remain within the traditional U.S. custody chain while Oasis Pro TA mints one-for-one tokenized entitlements on Ethereum. Financial infrastructure provider Broadridge will handle proxy voting, regulatory disclosures and shareholder communications, giving token holders the same governance rights as traditional brokerage account holders. The tokens are not yet available to U.S. investors.
The launch follows the SEC's January staff statement outlining how a third-party custodial model could comply with existing securities laws — an alternative to issuer-sponsored tokenization where the issuer of the underlying security is involved in the process. With Ondo already managing more than $1 billion in tokenized securities across 430-plus stocks and ETFs outside the U.S., the expansion into the domestic market signals that tokenization is moving from offshore experiments into regulated U.S. infrastructure. Citi projects tokenized securities could reach $5.5 trillion by 2030.
The SEC's January guidance addressed a growing debate over whether tokenized stocks issued without issuer involvement confer the same rights as traditional shares. OpenAI said last year it did not authorize Robinhood's tokenized offering tied to its shares, warning the tokens did not represent equity in the company.
Ondo's model avoids that ambiguity. Regulated custodians hold the underlying securities, while the broker-dealer, transfer agent and custody controls enforce transfer restrictions. Broadridge's integration extends shareholder communications, proxy materials and voting rights to token holders through its existing investor services infrastructure, including its ProxyVote.com platform.
"Tokenization will only scale when it delivers both innovation and investor confidence," Doug DeSchutter, President of Broadridge's Investor Communication Solutions business, said. "By enabling proxy voting, issuer communications, and regulatory disclosures for Ondo's token holders, we're providing them with the full range of trusted governance capabilities for tokenized securities regardless of how assets are structured."
The move comes as tokenized equities gain momentum across both crypto and traditional finance. Binance's tokenized equity platform Bstocks crossed $1 billion in assets under management within its first 30 days, posting $3 billion in cumulative trading volume. The Depository Trust & Clearing Corporation has expanded blockchain-based infrastructure, and exchanges including Nasdaq and the New York Stock Exchange have announced tokenization initiatives that would integrate blockchain technology into regulated securities markets.
This article is for informational purposes only and does not constitute investment advice.
