- Ondo Finance is seeking SEC approval to use Ethereum to manage tokenized equities.
- The move comes as regulators show growing openness, with tokenized assets expected to expand from $23B to trillions in the coming years.
The shift toward bringing traditional finance on-chain is being further shaped as Ondo Finance seeks regulatory clarity. The firm is seeking confirmation from the U.S. Securities and Exchange Commission over a new model that would use Ethereum to manage tokenized equities.
Ondo’s Ethereum Model Aims to Modernize Equity Access
Ondo has submitted a no-action request to the SEC. This means the firm is asking regulators to confirm they will not take enforcement action against its proposed structure.
The model is tied to its Global Markets platform. It already offers tokenized notes that give non-U.S. investors exposure to U.S. stocks and ETFs.
Under the new setup, Ondo records ownership on Ethereum, while it holds the actual stocks through traditional systems like the Depository Trust Company via broker-dealer Alpaca.
This approach separates custody from recordkeeping. Blockchain would handle transparency and tracking, while traditional infrastructure would hold the assets.
SEC Signals Openness to Tokenization
There are growing signs that regulators are warming up to tokenization. Hester Peirce has encouraged firms to engage directly with the SEC when exploring blockchain-based securities.
At the same time, policymakers are working on refining rules to support this emerging sector. During a recent hearing, Andy Barr stated that tokenization of securities is inevitable, though investor protection remains a priority.
The SEC has already allowed some initiatives to move forward. Exchanges and platforms like Nasdaq are exploring tokenized share trading, while firms such as Coinbase and Kraken are expanding into on-chain equities.
Tokenized Assets Market Poised for Massive Growth
Tokenized real-world assets are still in early stages but are growing steadily. The market is currently valued at around $23 billion, with Ondo holding a notable share.
Long-term projections suggest rapid expansion. Analysts estimate the sector could reach between $2 trillion and over $10 trillion by 2030.
This growth is driven by demand for faster settlement, improved transparency, and global access to financial products.
A Key Step Toward On-chain Finance
Ondo’s request could mark an important step in bridging traditional finance and blockchain. Regulatory clarity would help firms build with confidence and attract institutional participation.
If approved, the model could reshape how firms issue, track, and provide access to equities in the future.
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Disclaimer:
This content is for informational purposes only and should not be considered financial, investment, or legal advice. Always do your own research and consult a qualified professional before making any decisions.