Hassan Maishera
TL;DR
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Ondo Finance requests the SEC's approval to use Ethereum for tokenizing securities entitlements tied to U.S. stocks and ETFs.
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The model aims to streamline collateral management and record-keeping.
Ondo Seeks SEC Clearance for Tokenized Equities Model on Ethereum
Real-world asset tokenization firm Ondo Finance is seeking confirmation from the U.S. Securities and Exchange Commission (SEC) that it will not face enforcement over a proposed model utilizing Ethereum to record and administer certain securities entitlements in tokenized form.
In a no-action letter request submitted on Monday, Ondo detailed a model linked to its Ondo Global Markets platform, which offers "tokenized notes" providing non-U.S. investors with exposure to U.S.-listed stocks and ETFs.
The request specifically addresses Ondo’s plan to tokenize "security entitlements" tied to equities, which would be represented on-chain, while the underlying stocks and ETFs would continue to be held through the Depository Trust Company via U.S. broker-dealer Alpaca.
The primary change to Ondo's existing structure lies in the tracking system. Ondo intends to create tokens on Ethereum that represent its underlying stock entitlements, helping to manage collateral and keep records aligned.
The push for tokenization-friendly rulemaking has gained traction, with U.S. regulators under the Trump administration expressing a growing openness to tokenized assets.
The regulator has already approved several tokenization initiatives, including a rule change that allows Nasdaq to support tokenized share trading. Other firms, including the New York Stock Exchange, Robinhood, Kraken, and Coinbase, are also launching on-chain equities offerings.
The tokenized asset market is expected to grow significantly, with analysts forecasting that the sector could reach trillions of dollars in value over the next decade. Estimates range from $2 trillion to over $10 trillion by 2030. Currently, the tokenized real-world asset market stands at around $23 billion, with Ondo Finance accounting for approximately $2.8 billion.
The SEC is also making huge strides in crypto regulation in the United States. Last week, the regulator submitted Reg Crypto to the OIRA, the final step before it is published as a proposed rule. This is part of the new strategy, leaving the enforcement-by-litigation of the Gensler-era behind.
