TL;DR:
- Ondo Finance enabled two-way in-kind conversions between traditional shares custodied at Alpaca and Ondo Stocks tokens.
- The mechanism operates via internal book-entry transfers between Alpaca accounts across the Ethereum and BNB Chain networks.
- Access to the Instant Tokenization Network (ITN) is restricted to institutional clients approved on a case-by-case basis by both entities.
During Monday’s session, Ondo Finance launched an institutional system to turn existing shares into onchain stocks, integrating in-kind transfers into its issuance infrastructure.
Introducing a new way to bring shares onchain.
Starting today, approved institutions can use shares they already hold to mint Ondo Stocks through Alpaca’s Instant Tokenization Network.
This gives institutions a direct path from existing share inventory to onchain markets,… pic.twitter.com/70VKVGaKnb
— Ondo Finance (@Ondo) September 21, 2026
The new feature operates in conjunction with the Instant Tokenization Network (ITN) powered by brokerage firm Alpaca. According to Ondo Finance, approved institutions can contribute traditional equity inventory to mint equivalent Ondo Stocks tokens or execute the reverse direct redemption process.
This mechanism adds an alternative primary market pathway to the cash-funded workflow previously utilized by the platform.
Under the initial cash subscription framework, a trader holding equity securities was required to secure independent cash liquidity to mint tokens. Ondo Finance’s technical announcement explains that this requirement introduced additional financing costs and temporal mismatches between underlying shareholdings and tokenized positions.
Through the ITN integration, the underlying shares are transferred internally from the institution’s Alpaca brokerage account to Ondo’s custodial account within the same intermediary.
Once the book-entry transfer is confirmed, smart contracts mint the corresponding digital assets. The company’s report specifies that the redemption process mirrors the exact same steps in reverse, returning the traditional securities to the participant’s account.
Operational Mechanics and Institutional Liquidity Expansion
The service will initially be operational across the Ethereum and BNB Chain blockchain networks. Access to this rail is not open to the general public. The company noted that eligibility is granted on a case-by-case basis to corporate entities maintaining active, verified accounts with both Ondo and Alpaca.
Additionally, participants must complete regulatory and due diligence requirements mandated by both parties prior to activating the technical interface.
By circumventing prior cash liquidations on traditional secondary markets, market makers can mobilize existing portfolios without incurring slippage from forced selling. Data from Ondo Finance indicates that automating the workflow eliminates per-transaction manual reviews, significantly lowering latency in inventory management.
Ondo Stocks keeps its product offerings tethered to the trading hours and liquidity of U.S. exchanges, such as the New York Stock Exchange and Nasdaq, through a continuous issuance framework.
According to analysis from Ondo Finance, incorporating in-kind transfers could facilitate faster inventory replenishment for institutional market makers. The firm suggests that reduced operational friction serves as a key factor likely to tighten bid-ask spreads across the decentralized trading venues where these securities circulate.
On the corporate governance and settlement infrastructure front, this integration comes five days after Fund/SERV—a service operated by the Depository Trust & Clearing Corporation (DTCC)—admitted Ondo Finance as its first tokenization-focused member on September 16, 2026.
Both entities confirmed that institutional onboarding applications will remain open over the coming weeks of this quarter for firms seeking to connect their Alpaca custody accounts with Ondo Stocks contracts.
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