Ondo Finance has activated a significant new feature for its institutional clients, enabling in-kind minting and redemption for its tokenized stock products. The service, which went live on September 21, 2026, leverages infrastructure partner Alpaca’s Instant Tokenization Network (ITN) to allow approved institutions to convert existing equity holdings directly into on-chain tokens without first selling them for cash.
This development removes a major point of friction for financial institutions entering the digital asset space. Previously, minting tokenized stock equivalents required selling the underlying shares, transferring the cash proceeds, and then using those funds to create the on-chain position. The new workflow streamlines this process, allowing for direct conversion on the Ethereum and BNB Chain networks.
Ondo Alpaca in-kind minting offers a more efficient bridge between TradFi and DeFi
The introduction of in-kind conversions aligns the tokenization process more closely with the creation and redemption mechanisms common in traditional finance, particularly with exchange-traded funds (ETFs). For large institutions and market makers, this shift is critical for improving capital efficiency and reducing operational complexities when engaging with onchain tokenized stock trading.
Instead of liquidating a position in a traditional brokerage account to fund a new one in a tokenized environment, firms can now move the assets directly. This minimizes transaction costs, eliminates potential price slippage from buying and selling, and removes timing mismatches between the two markets. The ultimate goal is to create a more seamless and liquid environment for tokenized real-world assets.
The service is strictly limited to institutional participants who have been approved by both Ondo Finance and Alpaca. It is not a retail-facing product, underscoring its design as a piece of core financial market infrastructure. Interested firms must hold active accounts with both companies and complete the required onboarding to gain access to the feature.
How the in-kind conversion process works
The mechanics of the new system are handled through Alpaca’s Instant Tokenization Network (ITN), which was first launched in October 2025. The process is designed to be automated and operate around the clock, breaking free from traditional market hours.
For minting, an approved institution initiates a request to create a tokenized position. The underlying stock or ETF is then transferred from the institution’s own Alpaca brokerage account to Ondo Finance’s Alpaca account. This occurs as an internal book transfer, making it a swift and efficient operation. Once the transfer is complete, Ondo issues the corresponding tokenized stock on a supported blockchain.
Redemption follows the same logic in reverse. An institution can redeem its Ondo Stocks tokens, which triggers the transfer of the underlying shares from Ondo’s account back into the institution’s Alpaca account. This creates a direct physical settlement pathway that was previously unavailable, strengthening the link between the token and its real-world reference asset. This off-chain settlement efficiency is a major step forward.
Supporting Ondo’s multi-billion dollar platform
This infrastructure enhancement supports one of the fastest-growing platforms in the tokenized securities space. Ondo Finance first launched its tokenized stock offerings in September 2025 and quickly gained traction, surpassing $1 billion in total value locked (TVL) by May 2026. By June 2026, the platform had already processed over $20 billion in cumulative trading volume.
According to data from RWA.xyz on September 22, 2026, the Ondo platform now accounts for $3.63 billion in distributed asset value across more than 440 tokenized products. It boasts over 485,000 unique holder addresses and sees monthly transfer volumes in the range of $1.58 billion. The growth of the total altcoin market cap has provided a favorable backdrop for such specialized protocols.
Ondo’s assets are distributed across several blockchains, with approximately $2 billion residing on Ethereum, $407 million on BNB Chain, and over $300 million on Solana. While the current in-kind minting service is available on Ethereum and BNB Chain, the platform’s multi-chain presence highlights the broad demand for tokenized U.S. equities.
The foundational role of Alpaca’s network
The collaboration leans heavily on the specialized infrastructure built by Alpaca, which raised $135 million in July 2026 to expand its tokenization services. The firm has established a dominant position in the niche, reportedly clearing or providing custody for approximately 94% of all tokenized U.S. equities in the market. Its ITN was purpose-built to facilitate the 24/7 creation and redemption of tokens against brokerage-held shares.
While Ondo’s tokenized stocks provide holders with economic exposure to the underlying securities, they are legally distinct products. They are not shares themselves and do not automatically confer shareholder rights.
However, for the select group of institutions admitted to this new program, the in-kind redemption feature creates a direct and reliable bridge back to the underlying shares, a crucial feature for market makers and arbitrageurs who depend on tight asset pegs.