Ondo Finance has opened a new route that allows approved institutions to mint its tokenized stocks using shares they already hold, rather than depositing new cash. The share-funded conversions are live on Ethereum and BNB Chain.

Alpaca book transfers replace cash funding

The mechanism runs on Alpaca's Instant Tokenization Network (ITN) and operates alongside Ondo's existing cash-funded minting. According to Ondo's September 21 announcement, an approved institution moves shares from its own Alpaca account to the Ondopaca account through an internal book transfer. Ondo then creates tokens representing those shares on the blockchain.

When the institution redeems its Ondo Stocks tokens, the underlying shares are returned to its Alpaca account. Conversions do not require manual approval on each transaction, Ondo said. Alpaca Clearing, a FINRA-regulated broker-dealer, provides the brokerage and custody behind the network. The design forms a closed loop between equity custody and onchain representation: an institution can mint from shares it already holds and redeem back into shares, keeping the underlying position inside a FINRA-regulated broker-dealer's custody rather than converting it to cash.

Ondo Stocks also trade on Solana, but the announcement cited conversions only on Ethereum and BNB Chain. Whether conversion support extends to Solana is not addressed in the announcement.

Ondo expects the new route to give market makers a way to refill token inventory, providing "tighter spreads and deeper liquidity" to secondary markets.

Access limited to approved Alpaca account holders

Minting from equities is available to approved institutions on Alpaca on a case-by-case basis. Participants must hold active accounts on both Ondo and Alpaca, and Ondo notes that ITN is not a generally available Ondo Stocks feature. Taken together, the eligibility conditions confine share-funded minting to a narrow set of users: institutions individually approved by Alpaca that also satisfy Ondo's distribution rules.

Ondo says it provides the tokens only to eligible non-U.S. persons, and that the tokens give economic exposure to the referenced securities without being stocks, ETFs, or ADRs. That restriction applies even though the underlying shares remain with a FINRA-regulated broker-dealer.

Platform growth context

As of September 22, Ondo's platform held $3.63 billion in distributed assets across 441 products. The stock platform reached $1 billion in total value locked in May, less than a year after its launch in September 2025. In August, one trader bought about $2.3 million worth of QQQon tokens in a single Ethereum trade, according to Cryptopolitan.

In July, Ondo launched leveraged perpetual futures on U.S. stocks, ETFs, and commodities for non-U.S. traders.

The ITN rollout follows the SEC's September 17 order granting temporary, conditional exemptions for some Tokenized Securities Venues. Because those exemptions are temporary and conditional, the SEC's framework for Tokenized Securities Venues is a regulatory development to watch as tokenized-stock infrastructure expands.