Key Highlights
- Ondo Finance rolls out the Ondo Bridge, which allows transfers of over 100 tokenized U.S. stocks and ETFs between the Ethereum and BNB Chain blockchains
- Ondo Global Markets is the leading tokenized securities platform worldwide, surpassing $350 million in total value locked (TVL)
- However, the World Federation of Exchanges (WFE) is actively calling out the SEC against giving special exemptions to tokenized securities
On December 18, Ondo Finance announced the launch of the bridge, which is the largest tokenized stocks and ETFs platform, according to the official post on X.
This announcement comes after yesterday’s launch of Bridge, which allows tokenized stocks and exchange-traded funds (ETFs) to move freely between different blockchains for the first time.
Developed in partnership with LayerZero, the bridge will allow a smooth transfer of over 100 tokenized assets, including stocks like Apple and Tesla, between the Ethereum and BNB Chain networks.
Ondo Finance President Ian De Bode stated in the press release, “The stage is set for the rapid expansion of Ondo Global Markets across the multi-chain economy. Launching this Ondo Bridge with LayerZero empowers users to seamlessly transfer 100+ tokenized stocks and ETFs between Ethereum and BNB Chain, with many more chains coming soon. Moreover, with any wallet, protocol, or app in LayerZero’s ecosystem now able to easily integrate Ondo assets out of the box, we’re accelerating the creation of advanced cross-chain use cases and embedding Ondo tokenized stocks as foundational DeFi assets.”
LayerZero Labs Co-Founder and CEO Bryan Pellegrino said, “Tokenized assets are quickly becoming the better version of everything that already exists in traditional markets: more transparent, more programmable, and able to move with the speed and finality of the internet. As the world shifts toward digitized stocks, ETFs, and other financial instruments, users will expect these assets to function like stablecoins — becoming instant, portable, and available everywhere. LayerZero is building the foundation for that future. We’re excited to support Ondo as they bring the next generation of financial assets onchain and make them accessible across the global crypto economy.”
How Ondo Finance Converts Stocks into Digital Tokens
The new bridge is built on the foundation of Ondo Global Markets, which has become the world’s largest platform for tokenized securities. The platform works by taking actual U.S. stocks and ETFs held at registered broker-dealers and creating an equivalent digital token on a blockchain. Each one of these created tokens is backed 1:1 by the real security, allowing holders to benefit from price gains and dividends.
This tokenization is developed to boost accessibility, which offers users in regions like Europe and Asia-Pacific the ability to mint or redeem tokens for the underlying stocks 5 days a week.
The tokens are priced using reliable data oracles from Chainlink and can be traded peer-to-peer at any time. It is important to know that these are economic exposure tokens.
Tokenization Stocks Attract Major Players, But Face Hurdles
It is not the only player that is operating in the tokenization space. Coinbase has revealed its plan to bring tokenized stocks directly to its user base. The exchange is reportedly developing an everything app that would allow mainstream retail customers to trade digital stocks around the clock.
Similarly, Edel Finance is also developing another layer to launch a testnet for lending and borrowing tokenized equities. Built on the Base network and inspired by Aave, Edel will accept tokens from issuers. This will allow users earn yield by lending out their digital Tesla shares or borrowing against them.
Despite this boom in tokenization, there are some critics who are opposing this concept. The World Federation of Exchanges (WFE), whose members include Nasdaq, NYSE, and Deutsche Börse, has actively lobbied regulators like the U.S. Securities and Exchange Commission (SEC). The WFE raised questions on granting special “innovation exemptions” to crypto platforms offering tokenized stocks.
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