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Reported by The Defiant, Ondo Finance, a DeFi project offering some of the leading tokenized U.S. treasuries products, has introduced a new solution that taps into the liquidity of traditional financial markets.
Ondo Global Markets will issue tokens representing ownership of a security while the asset itself will be held in traditional custody services. While details of the implementation are not yet public, the tokens will trade on-chain, while instructions like transfers will then be transmitted back to broker-dealers and custodians to carry out off-chain.
Nathan Allman, founder and CEO of Ondo Finance, is excited to drive the experiment in tokenization. “We're very focused on sort of enabling these public securities to be used in on-chain financial systems,”
With Ondo Global Markets, settlement, the time period during which a trade is finalized, will still work the same as traditional securities, Allman said. “It’s just that there’s this 24/7 on-chain abstraction to it.” Current settlement for U.S. securities follows a “T+2” model, meaning that it takes two business days for a trade to be considered final.
Tokenized securities have long been a holy grail in the blockchain space. Entrepreneurs have experimented with different models over the years with varying degrees of success. Tokenized U.S. Treasuries have gained the most traction since 2022 due to interest rates rising to their highest levels in two decades.
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