Ondo Finance Launches In-Kind Minting for Tokenized Stocks via Alpaca Integration

This integration enhances capital efficiency and reduces settlement friction in the growing market for tokenized equities.

• Ondo Finance launched in-kind minting and redemption for tokenized stocks on September 23, 2026.
• Integration with Alpaca's Instant Tokenization Network allows institutions to deposit existing equity holdings directly to mint corresponding Ondo Stocks tokens.
• This update is exclusive to approved institutional users, bypassing previous cash-conversion requirements.

• Prior to this update, institutions had to sell shares for cash before creating tokenized positions, incurring financing costs and timing mismatches.
• Alpaca's Instant Tokenization Network, launched in 2025, provides the necessary infrastructure for direct share-to-token conversions.
• Ondo Finance previously introduced 24/7 minting and redemption capabilities in June 2026, indicating a trend towards more flexible tokenized asset management.

On September 21, 2026, Ondo Finance activated its in-kind conversion functionality through a partnership with Alpaca, marking a significant shift in how institutional investors can manage their tokenized equity holdings. This new feature allows approved institutions to transfer shares directly from their Alpaca accounts to Ondo’s account, triggering the issuance of matching Ondo Stocks tokens on Ethereum and BNB Chain. The reverse process enables institutions to redeem tokens for underlying shares, effectively streamlining the workflow for tokenized equities.

This update is particularly relevant for institutional participants, as it eliminates the need for cash conversion, which had previously introduced unnecessary financing costs and timing mismatches. By allowing institutions to deposit existing equity holdings directly, Ondo Finance is addressing a critical pain point in the tokenized equity market. The integration with Alpaca’s Instant Tokenization Network not only enhances operational efficiency but also positions Ondo Finance as a leader in the evolving landscape of tokenized assets.

The feature is currently restricted to KYC/AML-verified institutions with active accounts at both Ondo and Alpaca, ensuring compliance and security in transactions. This exclusivity underscores the focus on institutional participants, who are increasingly looking for ways to optimize their capital efficiency in the tokenized equity space. As of September 22, 2026, Ondo Finance had distributed assets across 441 products, amounting to $3.63 billion, indicating a robust market presence.

The operational mechanics of this update are designed to reduce settlement friction, which has been a significant barrier to the widespread adoption of tokenized equities. By facilitating direct share-to-token conversions, Ondo Finance and Alpaca are paving the way for a more fluid and efficient market, potentially attracting more institutional liquidity providers to the space.

• Institutional investors: They will benefit from reduced costs and improved efficiency in managing tokenized equities.
• Brokerage firms: Firms using Alpaca's network will have enhanced capabilities to offer their clients.
• Asset managers: They can streamline their workflows, making it easier to manage diverse portfolios of tokenized assets.

• Adoption rates among institutions: Monitoring how quickly institutions integrate this new feature will indicate its impact on the market.
• Market response: Watch for any shifts in trading volumes or liquidity in tokenized equities as this feature gains traction.
• Regulatory developments: Keep an eye on any regulatory responses or changes that could affect the operational landscape for tokenized assets.